IRS, DOL and HHS Propose Rules on Fertility Benefits

Jointly, on May 10, the IRS, DOL and HHS have proposed rules that would allow certain fertility benefits to be classified as excepted benefits. Excepted benefits are generally exempt from ACA market reforms and certain HIPAA requirements. Under the proposed regulations, fertility benefits can qualify as excepted benefits if (1) substantially all of the benefits are for diagnosis, mitigation or treatment of infertility or certain other related reproductive health conditions, (2) the benefits are capped at a maximum of $120,000 for the participant and their beneficiaries, indexed for inflation for plan years starting after 2028, and (3) the employer provides a notice clearly describing the coverage and meets other requirements. To qualify as an excepted benefit, the fertility benefits either (1) must be provided under a separate policy, certificate or contract of insurance or (2) otherwise must not be an integral part of the employer's traditional group health plan. For more information on the rules governing excepted benefits, visit Tax Facts Online. Read More: Link to Q8864. Note: Q is updated.