Federal Agencies Issue Proposed Rules on Offering Fertility Benefits
On May 10, 2026, the U.S. Departments of Labor, Health and Human Services, and the Treasury (collectively, the Departments) jointly issued proposed rules that would create a new category of limited excepted benefits that employers can use to offer fertility benefits.
The proposed rules build on Executive Order 14216 and the Departments’ October 2025 guidance, which clarified that employers could offer fertility benefits through three existing excepted benefit pathways: (1) a fully insured independent, non-coordinated excepted benefit policy; (2) an excepted benefit HRA; and (3) an employee assistance program offering coaching and navigator services.
Key Highlights
The proposed rule would establish a new category of limited excepted benefits. Excepted benefits are certain types of employee benefits that are not subject to HIPAA’s portability rules (like special enrollment rights and nondiscrimination rules), the ACA’s market reforms (such as annual limit bans and preventive care mandates) and certain other federal health care coverage laws. The new category would apply limiting principles similar to those already in place for other limited excepted benefits, with the following main requirements:
- Substantially all benefits must be for the diagnosis, mitigation or treatment of infertility or related reproductive health conditions
- Benefits are capped at a combined lifetime maximum of $120,000 for the participant and their beneficiaries, indexed for inflation for plan years beginning after 2028
- The benefits would be required to be provided under a separate policy or otherwise not be an integral part of the plan maintained by the same plan sponsor
- The plan or issuer must provide a written notice to participants and beneficiaries that clearly describes the coverage, including its benefits and limitations, how to access in‑network providers and how to submit claims. This notice must be written in a manner understandable to the average participant and must be provided at the first opportunity to enroll, annually thereafter, and upon request.
Employer Takeaway
The proposed rules would give employers a new option to offer fertility benefits as a limited excepted benefit. Employers that choose to offer fertility benefits under this new category would have flexibility in plan design, subject to the requirements above. While no action is required at this time, employers interested in offering fertility benefits should monitor the rulemaking closely and work with benefits counsel to evaluate their options.
More information can be found on the DOL’s Excepted Fertility Benefits webpage.
EBSA Memorandum Outlines Shifting Priorities for ERISA Enforcement
On April 14, 2026, the Employee Benefits Security Administration (EBSA) released a memorandum setting forth its enforcement priorities and guiding principles. According to EBSA, these priorities and principles are designed to ensure that the agency’s enforcement is “fair, even-handed, responsive and focused.” The memorandum reflects an overall shift to prioritize enforcement actions related to violations of the duty of loyalty, rather than prudence, in the operation of employee benefit plans.
Private-sector employers should periodically review their compliance with the Employee Retirement Income Security Act’s (ERISA) fiduciary requirements, particularly adhering to the duty of loyalty and avoiding prohibited transactions that involve impermissible conflicts of interest.
Enforcement Activity
EBSA is an agency within the U.S. Department of Labor (DOL) that administers and enforces ERISA, which establishes fiduciary and other standards for employee benefit plans sponsored by private-sector employers. During the 2025 fiscal year, EBSA closed 878 civil investigations. Of these, 63% resulted in monetary results for plans or other corrective action. In addition, EBSA referred 75 cases for civil litigation and closed 253 criminal investigations. EBSA’s criminal investigations led to the convictions of 45 individuals —including plan officials, corporate officers and service providers — for offenses related to employee benefit plans.
Guiding Priorities and Principles
EBSA’s memorandum outlines the following general standards for the agency’s enforcement actions:
- Focusing enforcement on the most egregious conduct and significant harm, particularly criminal cases and civil investigations where there is direct evidence of disloyalty or impermissible conflicts of interest (including conduct designed for the fiduciary’s self-enrichment or other goals unrelated to participants’ best interests, such as the promotion of environmental, social or governance objectives)
- Ensuring the agency does not regulate by enforcement and instead uses the notice-and-comment rulemaking process and sub-regulatory guidance to drive policy
- Requiring proper review by senior agency officials of all significant enforcement activities, including novel legal theories or areas of enforcement, issues that are or are reasonably likely to be the subject of circuit court splits, and issues that involve adopting a position that deviates from a prior EBSA position
- Committing to timely and responsive enforcement. Most routine investigations involving less complicated issues, such as delinquent employee contributions, disclosure and bonding violations, should be completed within 18 months. More complex investigations must be completed within 30 months unless there are exigent circumstances.
Employer Takeaway
The DOL and courts have recently shifted to rewarding a well-documented decision, even if sometimes the outcome is less than desirable. As we discussed on our webinar covering fiduciary duties and in our post on some recent ERISA court cases, having a properly documented trail for how and why you make decisions for your welfare plans can go a long way in proving up fiduciary prudence.
Deadline Reminder: RxDC Reports Are Due by June 1, 2026
Group health plans and health insurance issuers must annually submit detailed information on prescription drug and health care spending to the federal government. This reporting is referred to as the prescription drug data collection (or RxDC report). This is an annual reporting requirement; plans and issuers must submit these reports by June 1 of each year, covering information for the prior calendar year.
The next RxDC report is due by June 1, 2026, covering data for 2025. Employers should confirm they are taking steps to comply with this reporting deadline, such as providing information to third-party vendors on a timely basis.
RxDC Reporting
RxDC reporting is required for all group health plans, including fully insured, self-insured and level funded health plans. The RxDC report comprises several files, including those that require specific plan-level information, such as plan-year beginning and end dates and enrollment and premium data. It also includes files that require detailed information about medical and pharmacy benefits.
RxDC reports must be submitted through an online portal maintained by the Centers for Medicare and Medicaid Services (CMS). CMS’ RxDC website includes reporting instructions, frequently asked questions and other reporting resources. There are no major changes to the reporting instructions from the RxDC reporting that was completed in 2025.
Using Third Parties to Submit RxDC Files
Employers commonly use third parties, such as issuers, third-party administrators (TPAs) and pharmacy benefit managers (PBMs), to submit RxDC reports on behalf of their health plans. Employers using third parties to submit RxDC reports must ensure that this reporting responsibility is reflected in a written agreement with the third party.
Interim final rules provide that if the issuer of a fully insured group health plan is required by written agreement to submit the RxDC report but fails to do so, then the issuer — not the plan — violates the reporting requirements. However, unlike fully insured plans, the legal responsibility for RxDC reporting stays with a self-insured plan, even if a third party (for example, TPA or PBM) agrees to provide the report on the plan’s behalf. Because employers with self-insured plans are ultimately responsible for RxDC reporting, they should monitor their TPAs’ or PBMs’ compliance with this reporting requirement.
Employers will likely need to provide their third-party vendors with plan-specific information, such as enrollment and premium data, to complete their RxDC submission. Employers may work with multiple third parties to complete the RxDC report for their health plans. For example, a self-insured employer may use both its TPA and PBM to submit different portions of the RxDC report. A health plan’s submission is considered complete if CMS receives all required files, regardless of who submits them.
Employer Takeaway
Employers should contact their issuers, TPAs or PBMs to confirm that they will submit the RxDC files for their health plans by June 1, 2025. They should also verify that their written agreements with these third parties address this reporting responsibility.
Also, employers will likely need to provide their third-party vendors with plan-specific information, such as enrollment and premium data, to complete their RxDC submission. Employers should watch for these vendor surveys and promptly provide the requested information. Because employers with self-funded plans are ultimately responsible for RxDC reporting, they should monitor their TPAs’ or PBMs’ compliance with this reporting requirement. For more information, see our RxDC blog post from March.
