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Briefing

New Infertility Coverage Mandate for California Health Plans

Effective for plan years beginning on or after July 1, 2025, SB 729 (Chapter 930, Statutes of 2024) will require fully insured large group health plans in California to cover infertility diagnosis and treatment. It will require small group health plans to offer coverage for fertility and infertility services, but does not require small group plans to cover infertility diagnosis or treatment.

DEFINITION OF INFERTILITY

The law’s definition of “infertility” is broad and can be based on a licensed physician’s finding of infertility, a person’s inability to reproduce, either by themselves or with their partner, without medical intervention, or the failure to establish a pregnancy or to carry a pregnancy to live birth after regular, unprotected sexual intercourse. “Regular, unprotected sexual intercourse” is defined in the law as “no more than 12 months of unprotected sexual intercourse for a person under 35 years of age or no more than six months of unprotected sexual intercourse for a person 35 years of age or older.” The law also specifies that pregnancy resulting in miscarriage does not restart the 12-month or 6-month time period to qualify as having infertility.

The law also provides that coverage for the treatment of infertility and fertility services must be provided without discrimination on the basis of age, ancestry, color, disability, domestic partner status, gender, gender expression, gender identity, genetic information, marital status, national origin, race, religion, sex, or sexual orientation. This means that the coverage mandate will apply regardless of the covered person’s age or partnership status.

COVERAGE REQUIRED

The statute specifies that the fertility services covered include in vitro fertilization (IVF) with a maximum of three completed oocyte retrievals with unlimited embryo transfers in accordance with the guidelines of the American Society for Reproductive Medicine (ASRM), using single embryo transfer when recommended and medically appropriate.

As part of the legislative process, SB 729 was analyzed by the California Health Benefits Review Program (CHBRP). CHBRP’s analysis assumed that all nonexperimental fertility treatments would need to be covered for a plan to be compliant with the law. Those services include diagnosis, medications, surgery, artificial insemination, IVF, and IVF with intracytoplasmic sperm injection (ICSI). It is unclear whether SB 729 would require coverage for biological donor materials, gestational carriers or surrogacy services, or medical costs for the utilization of gestational carriers or surrogates. We are watching to see if these items are clarified by the Department of Managed Healthcare (DMHC) and the Department of Insurance (CDI) prior to the law’s effective date.

The statute also prohibits the following:

• Any exclusion, limitation, or restriction on coverage of fertility medications that are different from those imposed on other prescription medications;
• Any exclusion or denial of coverage of any fertility services based on a covered individual’s participation in fertility services provided by or to a third party (such as an oocyte, sperm, or embryo donor, gestational carrier, or surrogate); or
• Any deductible, copayment, coinsurance, benefit maximum, waiting period, or any other limitation on coverage for the diagnosis and treatment of infertility that are different from those imposed upon benefits for services not related to infertility.

PLANS IMPACTED

As stated above, these rules will apply to fully insured large group health plans issued in California on or after July 1, 2025. This means that plans that run on a calendar year will not incorporate this coverage until January 1, 2026. The law will apply to plans offered through CalPERS pursuant to the Public Employees’ Medical and Hospital Care Act (PEMHCA), but the effective date for those plans is delayed until July 1, 2027.

The law does not apply to self-funded plans, specialized plans (like dental-only or vision-only plans) or Medi-Cal. It does not apply to individual market coverage, and it does not mandate that small group plans cover infertility diagnosis or treatment.

The mandate also does not apply to religious employers, defined as those for whom each of the following is true:

• The inculcation of religious values is the purpose of the entity;
• The entity primarily employs persons who share the religious tenets of the entity;
• The entity serves primarily persons who share the religious tenets of the entity; and
• The entity is a nonprofit organization as described in Section 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code of 1986, as amended.

COSTS

CHBRP projected an initial 0.4% increase in employer premiums attributable to this mandate, rising to 0.55% two years after the mandate goes into effect (0.52% and 0.77% respectively for employers in CalPERS plans). While the mandate does not apply to self-funded plans, employers offering both self-funded and fully insured plans, and aiming to provide the same coverage across both, will need to work with their administrators and actuaries to determine the cost of incorporating SB 729 equivalent infertility coverage into their plans.

Keenan is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Clients are advised to consult with their own attorney for a determination of their legal rights, responsibilities, and liabilities, including the interpretation of any statute or regulation, or its application to the clients’ business activities.