On September 29, 2024, Governor Gavin Newsom signed Senate Bill (SB) No. 729 into law, expanding fertility insurance coverage in California. This historic measure marks a significant shift in reproductive health policy and aims to alleviate the financial burden associated with fertility treatments for many Californians. The new law will require certain fully insured health policies to cover the diagnosis and treatment of infertility. SB 729 will cover certain policies issued, amended, or renewed on or after July 1, 2025.

Quick Hits

• Under SB 729, effective July 1, 2025, certain health insurance policies in California will be required to cover the diagnosis and treatment of infertility.
• Insured health plans with at least 101 participants will be required to provide coverage for the diagnosis and treatment of infertility; insured plans with up to 100 participants will be required to offer coverage.
• SB 729 does not affect employers that “self-fund” their health plans, since those are governed by federal law. But it does purport to apply to insurance policies that cover any California employees, even if those policies are sitused in other states.

Current Law

California’s Knox-Keene Health Care Service Plan Act of 1975 does not require health insurance policies to cover infertility treatment. Instead, it requires that insurers offer employers the option to add general infertility treatment to their policies. However, this requirement to provide employers with the opportunity to add fertility treatment to their policies specifically does not require insurers to provide employers with the option to add in vitro fertilization (IVF) coverage.

New Law (SB 729)

Large Group Policies (At least 101 covered employees)

The new law requires large group policies to provide coverage for the diagnosis and treatment of infertility, including coverage for a maximum of three completed oocyte (egg) retrievals with unlimited embryo transfers.

Small Group Policies (One hundred or fewer covered employees)

The new law requires insurers to offer coverage for the diagnosis and treatment of infertility as riders to small group policies (but does not mandate that the coverage be included in the policies).

For both large and small group policies, the policy may not impose any limitations or cost sharing on such infertility or fertility services that are different from those imposed upon benefits for services not related to infertility or fertility.

Definition of “Infertility”

The law expands the definition of “infertility” to include a condition or status characterized by any of the following:

• “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.”
• “A person’s inability to reproduce either as an individual or with their partner without medical intervention.”
• “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 as “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.”

Coverage Requirements

SB 729 expressly requires that large group policies cover IVF, including a maximum of three completed oocyte retrievals with unlimited embryo transfers.

Policies also exclude fertility services based on an individual’s participation in fertility services provided by or to a “third party.” A third party includes an oocyte, sperm, or embryo donor, gestational carrier, or surrogate that enables an intended recipient to become a parent.

Notably, SB 729 applies to same-sex couples. However, the extent to which policies will be required to cover costs associated with infertility treatments for same-sex couples (e.g., the cost of a surrogate pregnancy or artificial insemination) remains to be seen.

CalPERS

The implementation of SB 729 is delayed for the California Public Employees’ Retirement System (CalPERS), the benefit system for state employees, until July 1, 2027.

Plans Outside California and Self-Insured Plans

An important distinction to note is that SB 729’s IVF-coverage mandate only extends to employers with fully insured health plans covering more than one hundred employees. However, SB 729 purports to apply to any fully insured plan that offers coverage to at least one resident of California and covers more than one hundred employees—even if the plan’s situs is not in California. For example, a fully insured health plan based in Nevada that covers a single California employee could be subject to SB 729.

Notably, SB 729 does not impact employers that self-fund their health plans. Self-funded plans are governed under the federal Employee Retirement Income Security Act.

Other Exceptions

The new law also does not impact the following employers and/or plans:

• Religious employers (that meet the following criteria: (1) “inculcation of religious values is the purpose of the entity,” (2) “the entity primarily employs persons who share the religious tenets of the entity,” (3) the entity serves primarily people who share the entity’s religious tenets, and (4) the entity is a qualified nonprofit organization)
• Specialized healthcare service plan contracts (contracts that provide healthcare services in a specific area of healthcare for a prepaid or periodic fee (e.g., dental care))
• Medi-Cal plans
• Certain entities that enter into contracts with the California Department of Health Care Services for the delivery of healthcare services

Key Takeaways

Any employer with a fully insured plan covering any California employees may want to consider the impact of this law. Employers could confirm that their health insurers are prepared to comply with SB 729, including notifying participants of the new IVF benefit offerings. Employers might also consider assessing their overall benefit offerings in light of the new coverage requirements. For example, employers maintaining a fully insured health plan subject to SB 729 that also offer fertility benefits through a separate vendor may want to determine whether the new IVF coverage mandate creates duplicative or redundant benefits.

Self-insured employers may want to consider any impact these new requirements could have on the labor market for California employees.