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Understanding the Delay in SB 729 Implementation

In the last 24 hours, we have seen a flurry of reports that the effective date of SB 729 (Menjivar), which mandates infertility coverage for fully insured large group health plans in California, has been delayed. This is not technically true. While there is a proposal to delay the effective date to January 1, 2026, this proposal would have to be passed by both houses of the legislature and signed into law by Governor Newsom.

Newsom Signing Message

Upon signing SB 729 into law last September, Governor Newsom wrote, “There is a better way to strengthen IVF coverage across California's health care delivery system, and the state has already begun this work. In January of this year, we started the process of updating the state's "benchmark" plan, which will set a new standard for commercial insurance health coverage. The services under evaluation specifically include infertility treatment and IVF. The state's proposed benefit design will be released later this year and adopted by the Legislature by May 2025.

I expect that IVF coverage will be included in the benchmark plan proposal adopted next spring, but may differ from the one in this bill. As a part of that process, I request that the Legislature change the effective date of this measure from July 1, 2025 to January 1, 2026, upon their return in January to allow an evaluation of the costs and benefit design in this bill within that broader context.”

Despite the Governor’s request, the Legislature did not introduce legislation changing the effective date, and the deadline for legislators to introduce new bills passed in February. So, how can this change take place? Cue the budget process…

Budget and “Trailer Bills”

The California Constitution requires the Legislature to pass a budget by June 15th each year. It’s been reported that both houses of the Legislature have approved funding to implement SB 729. The Assembly and Senate have agreed to allocate $691,000 in 2025–26, $2.03 million in 2026–27, and $2.125 million ongoing from the Managed Care Fund to fund implementation. They have also agreed to add seven state staff positions to the California Department of Managed Health Care (DMHC) and the California Department of Insurance (DOI) to support compliance assessment, file reviews, statistical consultation, clinical review, and enforcement investigations. While the budget bill has not passed both houses and gone to the Governor yet, it is expected to do so before June 15th.

Along with the budget legislation itself, each year the legislature typically sends the Governor a dozen or so “trailer bills”—legislation that implements the state budget by enacting corresponding policy changes in California law. The California Department of Finance keeps a running tally of trailer bill proposals on its website. One of the bills it lists would delay implementation of SB 729 until January 1, 2026, and give the DOI and DMHC until January 1, 2027 to issue compliance guidance.

We expect that the trailer bill language will make its way into actual legislation in coming days and are hopeful that it will be passed and signed into law before the law’s original July 1, 2025 effective date. Health insurance carriers are currently trying to make sense of the Governor’s and Legislature’s moves and decide whether to include the coverage beginning in 2025 as planned, or change plans if the law changes. We are carefully watching all of these decisions and will continue to alert clients as the law and carriers’ plans change.