The New “Must-Have” Employee Benefit? Commentary on the Growing Demand for Fertility Benefits
According to the CDC’s National Survey of Family Growth, up to one in eight couples will experience infertility, defined as one year of unsuccessful attempts at becoming pregnant or carrying a pregnancy to term. This exceeds the incidence rates of diabetes (9.4%), asthma (8.3%), and Alzheimer’s (4.4%). Despite the incidence rate, only 15 states mandate that insurers offer coverage for infertility treatments, creating an opportunity for employers to market fertility benefits as a meaningful point of differentiation.
Around 65% of American companies currently offer fertility benefits to employees. Limited employer coverage for fertility treatment has existed for over 30 years, but companies have historically resisted offering coverage for more expensive procedures such as artificial insemination or in-vitro fertilization (IVF). Once a benefit nearly exclusive to Silicon Valley tech giants and Big 3 consultants due to the high cost (often in excess of $20,000 per cycle), fertility treatment coverage that includes subsidies or full coverage IVF is becoming more powerful recruiting and retention tool in a competitive job market. For example, Starbucks was famously among the first companies to offer fertility coverage to hourly employees a few years ago.
Introduction of fertility benefits has been linked to improved employee retention, with nearly 90% of women who have IVF procedures reimbursed by their employer returning after maternity leave and over 60% expressing willingness to remain in a job for a longer period due to the coverage. The majority of women who receive reimbursement for IVF are obtaining coverage through their current employer, rather than not via their partner’s employer. Additionally, access to fertility preservation, such as egg freezing, is a growing priority for millennial employees, with over 65% considering access to coverage when choosing a new employer. Personalization also caters to millennial employees, with a growing number of companies leveraging fertility and maternity apps and fertility center partnerships to increase engagement and awareness for the benefit.
Fertility benefits can also support organizational diversity goals and a focus on women-friendly and LGBT-friendly initiatives. Willis Towers Watson’s Maternity, Family and Fertility Survey illustrates that 70% of employers are prioritizing diversity initiatives when evaluating fertility benefits and over 80% of surveyed employers are expected to cover same-sex couples in 2019. Implementation of a fixed level of lifetime coverage is becoming more common, which removes pre-authorization programs and eligibility restrictions that might have previously restricted participation among same-sex couples and among heterosexual couples experiencing a miscarriage or other types impaired fecundity (inability to become pregnant or carry a pregnancy to term).
Although some standardization is observable in benefits packages, limitations to self-funding due to high costs have restricted many small companies from offering benefit packages comparable to a blue-chip employer like General Electric or Procter & Gamble. Even among large employers, significant variability in benefit levels across industries and among plan designs suggests that the market for fertility insurance is still nascent and fluid. A “market standard” in line with other health benefits (e.g., two dental cleanings and a PCP check-up covered annually) may still be several years away.