California Insured Policies Must Cover Or Offer to Cover Fertility Treatments Later in 2025

Current Fertility Coverage in California

Current California law does not require health insurance policies issued in California to cover infertility treatment. Since 1990, health insurance policies issued in California have been required to provide the option to cover infertility treatment as a rider to the policies. Note that current law expressly excludes in vitro fertilization (IVF) from this required option.

New California Legislation (SB 729)

Large Group Policies (Covering 100+ employees)

SB 729 requires large group health insurance policies in California to cover the diagnosis and treatment of infertility and fertility services, including a maximum of three (3) completed oocyte (developing egg) retrievals with unlimited embryo transfers.

Small Group Policies (Covering 1-100 employees)

SB 729 requires small group health insurance policies in California to offer the option to employers to cover the diagnosis and treatment of infertility and fertility services, including IVF.

Importantly, small group policies are not required to cover these services, but carriers of small group policies must offer employers the option to cover them voluntarily.

Revised Definition of Infertility

SB 729 revised the definition of “infertility” to mean any of the following:

1. A licensed physician’s findings, based on a patient’s medical, sexual, and reproductive history, age, physical findings, diagnostic testing, or any combination of those factors.
2. A person’s inability to reproduce either as an individual or with their partner without medical intervention.

   NOTE: The above provision of the revised definition expands the definition of infertility to include same-sex couples and single individuals. Notwithstanding this expansion of coverage for California insurance policies, the IRS does not recognize an infertility diagnosis in same-sex couples in every instance. As such, employers should consider whether this coverage may require imputed income in some settings.

3. The failure to establish a pregnancy or to carry a pregnancy to live birth after regular, unprotected sexual intercourse.
   • Regular, unprotected sexual intercourse” here means no more than 12 months of unprotected sexual intercourse for a person under 35 years of age or no more than 6 months of unprotected sexual intercourse for a person 35 years of age or older.
   • This revised definition does not prevent testing and diagnosis of infertility before the 12-month or 6-month period to establish infertility.

Other Provisions

SB 729 prohibits both large and small group health insurance policies issued in California from:

• Excluding IVF from coverage.
• Excluding, limiting, or restricting coverage of fertility medications that are different from those imposed on other prescription medications.
• Imposing any deductible, copayment, coinsurance, benefit maximum, waiting period, or any other limitation on coverage for the diagnosis and treatment of infertility, which are different from those imposed upon benefits for services not related to infertility.
• Excluding or denying coverage of any fertility services based on a covered individual’s participation in fertility services provided by or to a third party.
  • For this purpose, “third party” includes:
    • an egg, sperm, or embryo donor, and
    • a gestational carrier or surrogate that enables an intended recipient to become a parent.

Effective Date

SB 729 will be effective for group health insurance policies in California that are “issued, amended, or renewed on or after July 1, 2025.”

Practically, this means that calendar year policies will be required to comply with SB 729 on their 2026 renewal date of January 1, 2026. Policies with non-calendar year renewals will be required to comply based on their next renewal date on or after July 1, 2025.

Additionally, this new law is delayed until July 1, 2027 for health insurance policies under the California Public Employees' Retirement System (CalPERS), the benefits system for California state employees.

Extraterritorial Basis of SB 729

The language of SB 729 states that this new fertility coverage mandate “applies to every disability insurance policy that is issued, amended, or renewed to residents of this state regardless of the situs of the contract,” confirming the extraterritorial basis of the law. This appears to require that SB 729 will apply to health insurance policies issued outside of California, to the extent the policy covers California resident employees. That being said, the text of SB 729 appears unclear as to whether the California Legislature intended this breadth of impact and/or if California insurance regulators would attempt to enforce these requirements against insurance carriers for policies issued out-of-state.

Risk Strategies will monitor guidance from the California Department of Managed Health Care and provide updates if and when available regarding this provision of the law.

Exemptions

SB 729 does not apply to the following:

• self-funded group health plans, including level-funded group health plans (due to ERISA preemption),
• religious employers,^[1]
• accident-only policies,
• specified disease policies,
• hospital indemnity policies, and
• specialized disability insurance policies.

Employer Considerations

Although the effective date for SB 729 is not until July 1, 2025, California employers, and certain out-of-state employers with California resident employees, should be aware of this new fertility coverage mandate for the large group insurance market.

For large group, fully insured health insurance policies in California, employers are encouraged to budget for the additional costs to policy premiums that are likely to result from this new fertility coverage mandate. Costs for a single cycle of IVF have been cited to range from $15,000 to $20,000 and can exceed $30,000.

For small group fully insured health insurance policies in California, employers are advised to consider the additional costs to policy premiums that are likely to result if the employer decides to opt in and offer this new fertility coverage.

In the meantime, employers should direct any questions regarding SB 729 to their health insurance carriers.

With SB 729, California joins the growing ranks of other states with laws requiring insurance coverage of fertility treatments, including IVF.

On a federal employment-related level, fertility treatments are a salient point of focus as the Pregnant Workers Fairness Act requires employers with 15 or more employees to provide reasonable accommodations, for employees impacted by pregnancy, including for fertility treatments. Click here for a Risk Strategies article with more information.

Finally: in other California employer-related news:

1. California leave for reproductive loss, which became effective on January 1, 2024: click here for a Risk Strategies article with more details.
2. Expanded leave benefits for employees working in California in 2025: click here for a Risk Strategies article with more details.

Risk Strategies is committed to keeping employers informed and up-to-date. Reach out to your Risk Strategies account team with any questions or email us directly at benefits@risk-strategies.com.

[1] “Religious employer” for this purpose is defined under California Insurance Code Section 10123.196(e)(2).