SB 463 - HB 595
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
March 7, 2025
Fiscal Analyst: Chris Higgins | Email: chris.higgins@capitol.tn.gov | Phone: 615-741-2564
SB 463 - HB 595
SUMMARY OF BILL: Enacts the Freedom to Grow Our Tennessee Families Act. Requires a
health insurer that issues, delivers, amends, or renews a health benefit plan that is in effect on or
after January 1, 2026, including the TennCare program, to provide coverage for fertility diagnostic
care; fertility treatment; and fertility preservation services, regardless of an enrollee's past or present
treatment for cancer, sickle cell disease, lupus, menorrhagia, endometriosis, or uterine fibroids.
Establishes that such coverage must include at least three complete oocyte retrievals with unlimited
embryo transfers from those oocyte retrievals or from any oocyte retrieval performed prior to
January 1, 2026, in accordance with the guidelines of the American Society for Reproductive
Medicine, using single embryo transfer when recommended and medically appropriate. Prohibits a
health insurer from imposing a waiting period or certain limitations relative to the required fertility
coverage. Does not require a health insurer to provide coverage for an experimental fertility
procedure or nonmedical costs related to donor gametes, donor embryos, or surrogacy.
Authorizes the Commissioner of the Department of Commerce and Insurance to promulgate rules
to effectuate the legislation, including, cost-sharing, benefit design, and clinical guidelines. Requires
the Commissioner to consider the clinical guidelines developed by the American Society for
Reproductive Medicine or a comparable organization when promulgating such rules.
Establishes that a caretaker relative who becomes ineligible for temporary assistance through the
Families First Act of 1996 for any reason, including failure to comply with work requirements or to
cooperate with child support obligations, is eligible for transitional childcare assistance for a period
of not less than six months.
Effective January 1, 2026.
FISCAL IMPACT:
STATE GOVERNMENT
EXPENDITURES General Fund
FY25-26 $53,710,000
FY26-27 & Subsequent Years $107,420,100
FEDERAL GOVERNMENT
EXPENDITURES
FY25-26 $66,665,600
FY26-27 & Subsequent Years $133,331,200
SB 463 - HB 595 2
LOCAL GOVERNMENT
EXPENDITURES Mandatory
FY25-26 $2,407,300
FY26-27 & Subsequent Years $4,814,500
Article II, Section 24 of the Tennessee Constitution provides that: no law of general application shall impose increased expenditure
requirements on cities or counties unless the General Assembly shall provide that the state share in the cost.
Assumptions:
Division of TennCare
• The Division of TennCare (Division) does not currently provide coverage for infertility
treatments for enrollees.
• The proposed legislation requires the Division to provide coverage for fertility treatments
related to conditions that diminish one's fertility; diagnosis and counseling for fertility
patients; and fertility services for those determined to be infertile.
• As of December 2024, there were 244,092 non-pregnant female enrollees between the ages
of 21 and 49 in the TennCare program.
• According to the 2024 KFF Women’s Health Survey (Survey), approximately 13 percent of
women ages 18 to 49 report needing fertility assistance services at some point for
themselves or their partner.
• It is assumed that at least 31,732 (244,092 x 13%) TennCare enrollees will be eligible for
fertility counseling and diagnosis coverage.
• The average cost of fertility diagnostic services is estimated to be $1,000; therefore, the
increase in expenditures for such services will be $31,732,000 (31,732 x $1,000).
• According to the same study, of those who need fertility assistance, approximately 38
percent are treated with medication to improve fertility.
• The average cost of fertility medication is $1,602 per treatment, resulting in an increase in
expenditures of $19,317,172 (31,732 x 38% x $1,602) for fertility treatment with medication.
• Approximately 14 percent of women needing fertility assistance utilize intrauterine
insemination (IUI), and another 14 percent utilize in-vitro fertilization (IVF).
• The average cost of IUI treatment is estimated to be $750 and the cost of IVF treatment is
estimated to be $33,025 per patient.
• There recurring increase in expenditures for IUI and IVF treatments is estimated to be
$150,028,550 {[(31,732 x 14%) x $750] + [(31,732 x 14%) x $33,025]}.
• It is estimated that seven percent of women needing fertility assistance, or 2,221 (31,732 x
7%), will utilize cryopreservation to preserve their eggs, at an average cost of $2,250.
• There will be an additional increase in expenditures of $4,997,250 (2,221 x $2,250) for
cryopreservation services.
• The total recurring increase in expenditures to the Division is estimated to be $206,074,972
($31,732,000 + $19,317,172 + $150,028,550 + $4,997,250).
• Medicaid expenditures receive matching funds at a rate of 64.323 percent federal to 35.677
percent state. Of this amount $73,521,368 ($206,074,972 x 35.677%) will be in state funds
and $132,553,604 ($206,074,972 x 64.323%) will be in federal funds.
SB 463 - HB 595 3
• Due to the January 1, 2026 effective date, in FY25-26 the increase in state expenditures will
be $36,760,684 ($73,521,368 x 50%), and the increase in federal expenditures will be
$66,276,802 ($132,553,604 x 50%).
• In order to receive federal matching funds, the coverage requirements of the proposed
legislation must be approved by the Centers for Medicare and Medicaid Services and added
to the Division's State Plan.
Division of Benefits Administration
• The proposed legislation will require an expansion of the coverage for fertility treatment
and preservation services by the plans under the State Group Insurance Program (SGIP).
• Based on information provided by the Division of Benefits Administration, it is estimated
that the additional coverage for testing, treatments, and other fertility services will result in a
recurring increase in expenditures of approximately $14,051,896 to the SGIP.
• It is estimated that 48 percent of members are on the State Employee Plan, 43 percent are
on the Local Education Plan and 9 percent are on the Local Government Plan.
• The state contributes 80 percent of member premiums resulting in a recurring increase in
state expenditures of $5,395,928 ($14,051,896 x 48% x 80%).
• Some state plan members' insurance premiums are funded through federal dollars. It is
estimated 14.41 percent of the state share of the state plan is funded with federal dollars,
resulting in an increase in federal expenditures of $777,553 ($5,395,928 x 14.41%).
• The state contributes 45 percent of instructional member premiums (75 percent of Local
Education Plan members) and 30 percent of support staff member premiums (25 percent
of Local Education Plan members) resulting in state expenditures of $2,492,455
[($14,051,896 x 43% x 75% x 45%) + ($14,051,896 x 43% x 25% x 30%)].
• The mandatory increase in expenditures for the local government share of the Local
Education Plan is estimated to be $3,549,860 [($14,051,896 x 43%) - $2,492,455)].
• The state does not contribute to the Local Government Plan. It is estimated the Local
Government Plan would be responsible for a mandatory increase in local expenditures
estimated to be $1,264,671 ($14,051,896 x 9%).
• Due to the January 1, 2026 effective date, the impact in FY25-26 will be approximately 50
percent of the total recurring cost.
• The total increase in state expenditures is estimated to be $7,110,830 ($5,395,928 - $777,553
+ $2,492,455) in FY26-27 and subsequent years, and $3,555,415 ($7,110,830 x 50%) in
FY25-26.
• The total increase in federal expenditures is estimated to be $777,553 in FY26-27 and
subsequent years, and $388,777 ($777,553 x 50%) in FY25-26.
• The total increase in mandatory local expenditures is estimated to be $4,814,531 ($3,549,860
+ $1,264,671) in FY26-27 and subsequent years, and $2,407,266 ($4,814,531 x 50%) in
FY25-26.
Department of Human Services
• The Department of Human Services (DHS) administers Families First, the state’s
Temporary Assistance for Needy Families (TANF) program, which provides temporary
cash assistance, transportation, child care assistance, educational supports, job training,
employment activities, and other support services to qualifying families.
SB 463 - HB 595 4
• Pursuant to Tenn. Code Ann. § 71-3-104(b)(1), a caretaker relative who becomes ineligible
for temporary assistance for any reason other than a failure to comply with work
requirements or to cooperate with child support obligations shall be eligible for transitional
childcare (TCC) assistance for a period specified by DHS while the caretaker relative is
employed, in school, or in employment training.
• The proposed legislation removes the language specifying that a caretaker relative must be
employed, in school, or in employment training to be eligible for TCC, and allows
caretakers who become ineligible for failure to comply with work requirements or child
support obligations to receive TCC.
• According to DHS, caretakers terminated for non-compliance with work requirements
currently receive three months of additional child care following termination in which to
regain compliance. Caretakers terminated for failure to cooperate with child support are not
eligible for TCC.
• Between 2022 and 2024, an average of 1,800 Families First cases were terminated for non-
compliance with work requirements and 1,500 cases were closed for failure to cooperate
with child support.
• The proposed legislation would allow an individual terminated for non-compliance with
work requirements to receive three additional months of benefits, and an individual
terminated for failing to cooperate with child care to receive six months of additional
benefits.
• According to information provided by DHS, monthly cost of assistance per child is $1,051,
and there are approximately 1.77 children per Families First household.
• The increase in expenditures from TCC payments for individuals who violate work
requirements is estimated to be $10,045,458 (1,800 cases x 1.77 children x $1,051 x 3
months).
• The increase in expenditures from payments for individuals who fail to cooperate with child
support is estimated to be $16,742,430 (1,500 cases x 1.77 children x $1,051 x 6 months).
• Federal funding will not be available for these payments; therefore, the total recurring
increase in state expenditures to the Families First program will be $26,787,888
($10,045,458 + $16,742,430).
• Due to the January 1, 2026 effective date, the total increase in state expenditures is
estimated to be $13,393,944 ($26,787,888 x 50%) in FY25-26.
Total Impact
• The total increase in state expenditures will be $53,710,043 ($36,760,684 + $3,555,415 +
$13,393,944) in FY25-26, and $107,420,086 ($73,521,368 + $7,110,830 + $26,787,888) in
FY26-27 and subsequent years.
• The total increase in federal expenditures will be $66,665,579 ($66,276,802 + $388,777) in
FY25-26, and $133,331,157 ($132,553,604 + $777,553) in FY26-27 and subsequent years.
• The total increase in mandatory local expenditures will be $2,407,266 in FY25-26, and
$4,814,531 in FY26-27 and subsequent years.
• The Department of Commerce and Insurance can promulgate rules and monitor
compliance with the proposed legislation utilizing existing personnel and resources, without
a significant increase in expenditures.
SB 463 - HB 595 5
IMPACT TO COMMERCE:
BUSINESS IMPACT
FISCAL YEAR REVENUE EXPENSES
FY25-26 $110,063,400 > $110,063,400
FY26-27 & Subsequent Years $220,126,900 > $220,126,900
OTHER COMMERCE IMPACT
It is unknown how many new jobs will be created in order to meet the demand of additional fertility
services. To the extent that more families are able to conceive children as a result of the legislation,
there will be additional unknown impacts to multiple sectors of the economy resulting from the
services for the increased population in the state.
Assumptions:
• Healthcare providers will experience an increase in business revenue of $220,126,868
($206,074,972 +$14,051,896) in FY26-27 and subsequent years, and $110,063,434
($220,126,868 x 50%) in FY25-26 from providing fertility counseling and treatment.
• For businesses to remain solvent, any increase in business expenditures to provide
additional services will be less than the amount of business revenue collected.
• It is unknown how many new jobs will be created in order to meet the demand of
additional fertility services.
• To the extent that more families are able to conceive children as a result of the legislation,
there will be additional unknown impacts to multiple sectors of the economy resulting from
services for the increased population in the state.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director