On May 10, 2026, the Department of Labor, Treasury, and Health and Human Services jointly issued a proposed rule that creates a brand-new category of employee benefit: a standalone fertility insurance product that employers can offer alongside their existing group health plan.
If you've ever looked at adding fertility coverage and balked at the cost or the carrier paperwork, this changes the math. The mechanics are closer to vision or dental than to traditional medical insurance.
What the rule actually does
The proposed rule operates under a regulatory framework called "limited excepted benefits" — coverage that sits outside the ACA and HIPAA's core group-health requirements. Translation: you can offer it without restructuring your group health plan, without coordination-of-benefits headaches, and without exposing it to most of the regulatory machinery that makes employer fertility coverage expensive today.
What's covered
The standalone product can include:
- In vitro fertilization (IVF) and intrauterine insemination (IUI)
- Fertility-related diagnostic lab tests and genetic testing
- Fertility medications
- Treatment for conditions that affect fertility — polycystic ovary syndrome (PCOS), endometriosis, low testosterone
| Detail | Value |
|---|---|
| Lifetime benefit cap | $120,000 per participant and beneficiaries |
| Inflation adjustment | Starting plan year 2028 |
| Coverage type | Limited excepted benefit (sits outside the group health plan) |
| Employer obligation | Voluntary — no mandate, no subsidy requirement |
| Effective date | After 60-day public comment period — likely late 2026 / early 2027 |
For context: a single IVF cycle typically runs $15,000–$20,000. The $120,000 cap covers multiple treatment rounds plus diagnostic and medication costs that often get rejected by traditional medical coverage.
Why this is different from offering fertility coverage today
Today, an employer who wants to give workers meaningful fertility coverage has two awkward options:
- Bake it into the main medical plan — drives premiums up across all employees, even those who'll never use it.
- Reimburse out-of-pocket through an HRA — creates per-employee dollar limits that rarely cover a full IVF cycle, plus the integration rules are messy.
The new excepted-benefit structure lets you offer a deep, dedicated benefit (six figures of lifetime coverage) that only employees who opt in actually use. The cost is targeted, the take-up is voluntary, and your group health plan stays untouched.
What employers should think about now
The rule isn't final yet — there's a 60-day public comment period before it can be finalized — but the structure has bipartisan momentum and is unlikely to be substantively changed. Smart moves before it ships:
- Decide whether to subsidize the premium. The rule allows employers to offer it without contributing; in that case, the employee pays the full premium. Most current adopters subsidize at least partially, the same way they subsidize dental or vision.
- Pick an eligibility class. The rule lets you limit who gets the benefit (e.g., full-time only, or after a service period). Match it to your retention strategy.
- Look at your competitors. Roughly 25% of large employers already offer some form of fertility benefit today; the share is far lower for small and mid-sized employers. Being early to add this puts you in the top quartile of the SMB segment.
How this fits into a broader benefits review
Fertility coverage is one of five federal moves landing in 2026 that materially change the small-employer benefits playbook — alongside Trump Accounts as a tax-free fringe benefit, the federal Saver's Match through TrumpIRA.gov, the CHOICE Arrangement (codified ICHRA), and the new healthcare price transparency rules.
If you've been holding off on a benefits refresh waiting for the dust to settle, the dust has settled. Worth a 30-minute conversation.
Want a look at what your current benefits stack would cost you to upgrade? Book a benefits + tax review and we'll walk through the five most relevant changes for your team size.
