Labor & Employment Law Daily Wrap Up, FEDERAL REGULATIONS—Proposed rule would create new excepted benefit category for fertility coverage, (May 11, 2026)

By Patricia K. Ruiz, J.D.

A proposed rule from the DOL, HHS, and Treasury outlines conditions for standalone employer offerings exempt from federal market reforms.

A proposed rule from the Departments of Labor, Health and Human Services, and Treasury would establish a new category of “excepted” fertility benefits, creating a regulatory pathway for employer-sponsored coverage that is exempt from certain federal requirements. The proposal would allow employers and issuers to offer fertility-related benefits separately from traditional group health plans, subject to defined conditions and limitations. The rule implements policy direction from a February 2025 executive order aimed at increasing access to in vitro fertilization and reducing regulatory barriers to treatment.

Excepted benefits. Excepted benefits are forms of coverage that, when they meet specific criteria, are not subject to group health plan requirements under statutes including HIPAA and the Affordable Care Act. The proposed rule would expand these categories by adding fertility benefits alongside existing limited excepted benefits such as dental, vision, and certain reimbursement arrangements.

Proposed rule. Under the proposal, employers and health insurance issuers could offer fertility-related items and services through a separate benefit structure, provided the coverage is primarily directed at the diagnosis, mitigation, or treatment of infertility and is furnished by licensed or authorized medical professionals. The departments indicated the framework would apply limiting principles similar to those governing other limited excepted benefits.

The agencies describe the proposal as addressing what they characterize as limited availability of fertility coverage in employer-sponsored plans. Although most workers of reproductive age receive health insurance through their employer, the departments state that “the majority do not have robust fertility coverage.” By easing statutory and regulatory constraints, the proposal is intended to expand benefit options and reduce costs associated with treatments such as in vitro fertilization.

Earlier actions. The proposal follows earlier agency guidance and rulemaking efforts related to fertility coverage as excepted benefits, including mechanisms allowing such benefits to be offered separately from traditional group health plans. The departments also have authority to create new limited excepted benefit categories by regulation, which they have previously exercised in contexts such as health flexible spending arrangements and employee assistance programs.

Executive order. The rulemaking is expressly tied to Executive Order 14216, issued February 18, 2025, titled Expanding Access to In Vitro Fertilization. That order declared it to be federal policy to ensure reliable and more affordable access to IVF and directed federal officials to develop recommendations to reduce out-of-pocket costs and regulatory barriers. In the executive order, the administration emphasized that infertility affects a significant portion of prospective parents and described IVF as a treatment option that can cost between $12,000 and $25,000 per cycle. The order instructed the Domestic Policy Council to propose measures to expand access and reduce costs, setting the groundwork for subsequent regulatory action. The departments’ proposal is positioned as a central component of those efforts, aligning regulatory flexibility with the executive branch’s stated objective of facilitating family formation through increased access to fertility treatment.

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