On May 10, 2026, the Departments of Labor, Health and Human Services, and Treasury did something that had been talked about for years: they proposed a rule that would let employers offer fertility coverage as a standalone benefit, carved out from major medical, the same way dental and vision work today. The rule comes with a lifetime cap of $120,000 per participant. If finalized, it takes effect for plan years beginning on or after January 1, 2027.
I’ve been watching this rule closely because I run MedEscape, and a large share of the patients we coordinate fertility care for are people who either have no employer coverage at all or have a plan that covers one cycle and stops. The proposed rule could change the math for millions of workers. But there’s a question nobody in the coverage is asking bluntly enough: how far does $120,000 actually go when you’re paying US fertility prices?
What the proposed rule does
The rule creates a new category of “limited excepted benefits” for fertility coverage. Excepted benefits are exempt from many federal health plan requirements under HIPAA, the ACA, and the No Surprises Act. That’s what makes them simpler for employers to administer and cheaper to offer. The Departments set the $120,000 lifetime maximum after noting that a single IVF cycle can cost $15,000 to $20,000, and that the average patient requires approximately 2.5 cycles to achieve a successful pregnancy (EBG Law, 2026). The cap is indexed for medical inflation starting in 2028.
Approximately 19 states already require some policies to cover IVF (Goodwin Law, 2026), but those mandates often exclude self-insured plans, which is how most large employers structure their benefits. The new rule gives self-insured employers a path to add standalone fertility coverage without tripping ACA compliance requirements.
There’s a catch that patient advocates have flagged: the current proposal contains no language preventing employers from downgrading existing coverage to the excepted benefit structure (INCIID, 2026). An employer that currently offers generous IVF coverage inside its medical plan could switch to the carved-out structure, reduce benefits, and present it as compliance with a new federal program. That gap will likely be a focus of the final rule.
How far $120,000 goes at US prices
The average all-in cost of one IVF cycle in the United States is $23,474, according to FertilityIQ data cited by Carrot Fertility (2026). That includes medications, monitoring, retrieval, lab work, and transfer. At that price, $120,000 covers roughly five cycles, which sounds generous.
But the math gets complicated. Add preimplantation genetic testing (PGT-A), which costs $3,000 to $6,000 per cycle (CNY Fertility, 2026). Add embryo freezing and annual storage fees. If donor eggs are involved, add another $15,000 to $35,000 per cycle. A couple needing donor-egg IVF at a high-cost metro clinic could exhaust the $120,000 cap in two or three attempts.
Reed Smith’s analysis of the proposed rule noted this directly: “participants may still regularly exceed $120,000 during their lifetime” once you factor in medications, diagnostics, genetic testing, and multiple procedures (Reed Smith, 2026). The $120,000 figure is a ceiling, and employers can set a lower one.
You can compare US fertility pricing against what the same procedures cost in Mexico, Costa Rica, and Panama on our treatment cost comparison table.
What the same $120,000 buys abroad
This is where the math changes entirely.
A standard own-egg IVF cycle in Mexico costs $4,000 to $8,000, including medications at many clinics (Medical Tourism Packages, 2026). In Costa Rica, a full cycle typically runs $4,000 to $7,000 (Medical Tourism Magazine, 2026). In Panama, IVF cycles range from $6,000 to $9,500 (PlacidWay, 2026).
At the US average of $23,474 per cycle, $120,000 covers about five attempts. At $7,000 per cycle in Mexico or Costa Rica, the same $120,000 covers seventeen. Even after you add flights, hotels, and a few hundred dollars in local expenses per trip, the gap is enormous. A patient who needs donor-egg IVF, which can run $25,000 to $35,000 in the US, might pay $9,000 to $12,000 at a board-certified clinic in Mexico (PlacidWay, 2026).
The math isn’t hypothetical. I coordinate this care through MedEscape every week. You can run your own numbers and see how many more cycles the same budget would cover at a screened clinic abroad.
What patients should ask their HR departments now
The proposed rule is still in the comment period review phase. The comment deadline was July 13, 2026, and the final rule could change significantly. But if your employer is considering offering an excepted fertility benefit, here are the questions that matter:
Does the plan cover medications, or only procedures?
Fertility medications alone can add $3,000 to $7,000 per cycle (Coastal Fertility, 2026). A plan that excludes them may look generous on paper and leave you with a large bill.
What is the employer’s lifetime cap?
The federal rule allows up to $120,000, but employers can set the limit lower. Ask for the specific number.
Does the plan allow treatment outside the United States?
Most employer health plans restrict coverage to US-based providers. If the excepted fertility benefit does the same, it locks employees into US pricing. A plan that allows board-certified international providers would let the same dollars go much further. MedEscape coordinates care with pre-screened fertility clinics in Mexico, Costa Rica, and Panama that meet US-comparable standards.
Will the new benefit replace existing coverage or supplement it?
This is the question INCIID and other patient groups have raised. If your employer already covers IVF inside its major medical plan, the new excepted benefit should be an addition, not a downgrade.
Who this rule helps most, and who it misses
The rule is most useful for workers at companies that currently offer no fertility coverage at all. According to the SHRM 2025 Employee Benefits Survey, only 24% of employers offer IVF coverage. Even among large employers (500+ employees), Mercer’s 2024 National Survey found 47% cover IVF, which means more than half still don’t. For those uncovered workers, any employer-funded fertility benefit is a real gain.
It’s less helpful for workers at companies that already have good coverage, because the carve-out structure and the $120K cap could become a ceiling where there was none before. And it doesn’t address the underlying price problem: a single IVF cycle in the US costs more than what a family of four spends on groceries in a year.
For a deeper look at how US fertility costs compare with what patients pay at screened clinics abroad, or to understand how we coordinate end-to-end fertility care at MedEscape, visit our provider screening page.
What I’d tell a benefits director who’s reading this
The rule gives you a real tool. Use it. But don’t assume $120,000 solves the problem at US prices, because for a meaningful share of your employees, it won’t cover enough cycles to get to a live birth. If you’re designing a fertility benefit and you want to maximize what your dollars actually buy for your people, the cross-border option is worth evaluating seriously. Board-certified reproductive endocrinologists at accredited clinics in Mexico, Costa Rica, and Panama deliver care at a fraction of the US price, and the clinical outcomes are comparable.
I built MedEscape to make that option safe and practical. If you want to see how it works, start here.