Summary: California Governor Gavin Newsom recently signed legislation (Senate Bill 729) in September 2024, requiring large group health insurance policies issued in California to cover infertility and fertility services, including in vitro fertilization (IVF), beginning July 1, 2025.
Small group health insurance policies issued in California will not be required to cover infertility and fertility services (including IVF), but will be required to offer employers the option to cover these services, beginning July 1, 2025.
Read on for more information.
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.
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.
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.
NOTE: California, along with Colorado, New York, and Vermont, expanded their definition of “small employer” from 1-50 employees to 1-100 employees for their “small group market” insurance policies.
SB 729 revised the definition of “infertility” to mean any of the following:
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.
SB 729 prohibits both large and small group health insurance policies issued in California from:
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.
NOTE: Governor Newsom has already requested the California Legislature to delay the effective date of SB 729 until January 1, 2026, as reflected in his official bill signing statement here.
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.
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.
SB 729 does not apply to the following:
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:
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).