Is It Time to Rethink Fertility Benefits?

Once unheard of as an employee benefit, employer-covered fertility treatments are having an extended time in the spotlight. A combination of trends is helping to keep them there: changing workforce demographics, the quest to recruit and retain the best talent, and the goal of reducing high-risk pregnancies and their attendant costs.

Offering fertility benefits is a way to support employees' financial and social well-being as well as their physical health, said Lori Casselman, chief health officer with League Inc., a digital employee-benefits platform based in Chicago. In many cases, "employers want to have a diverse and inclusive policy."

Fertility benefits are getting more attention at exactly the time when the Millennial generation is becoming more widespread in the workforce. Not coincidentally, many members of that cohort are now in their prime childbearing years. However, employer coverage of fertility treatments is a mixed bag.

While a number of companies have rolled out new or expanded fertility benefits, the general trend is toward less coverage for these treatments. According to the Society for Human Resource Management's (SHRM's)  2017 Employee Benefits report:

• The number of employers covering in vitro fertilization (IVF) declined to 24 percent in 2017, from 30 percent in 2013.
  

• Coverage for non-IVF fertility treatment fell to 26 percent from 34 percent during the same time frame.
  

Findings from SHRM's upcoming 2018 Employee Benefits report, to be published in June, show a continuing albeit slower decline:

• The percentage of employers covering IVF services fell slightly between 2018 (25 percent) and 2014 (26 percent).
  

• The same was true for non-IVF fertility treatments, which were covered by 27 percent of employers in 2018, down from 29 percent in 2014.
  

A key driver of this decline is likely to be the price of treatment. One round of IVF now costs up to $25,000 or more.

Even so, there are compelling reasons some employers are offering and even expanding these benefits.

Attracting and Retaining Employees

Any growth in fertility benefits coverage is occurring among employers in industries facing the strongest competition for talent. A review of coverage data from FertilityIQ, a firm that evaluates fertility doctors, shows a clear trend in industries such as finance, consulting and technology toward offering fertility benefits and expanding existing coverage.

From 2016 to 2017, for example, several high-profile employers increased their coverage limits, including:

• Pinterest (to $100,000 from $15,000).
  
• LinkedIn (to $75,000 from $15,000).
  
• American Express (to $35,000 from $20,000).
  

Generous fertility benefits also are offered by consulting firms Bain & Company and Boston Consulting Group, fashion company Chanel, and Bank of America, all of which offer coverage with no dollar limits.

[SHRM members-only toolkit: How to Design an Employee Benefits Program]

Fostering Loyalty

Infertility is stressful and takes a toll on an individual's emotional and physical health. An employer that offers benefits to help couples explore different treatments and pursue the ones most-likely to help is going to earn a high level of loyalty from the employees taking advantage of these programs, said Tammy Sun, CEO of fertility benefits provider Carrot.

"People are becoming more comfortable about having conversations around fertility," Sun pointed out. "HR departments may find themselves fielding questions from employees looking for help with the costs of fertility treatments."

How well the employer responds to that appeal could have a major effect on employees' loyalty, she noted. Employees receiving these benefits are also likely to be more productive if they have the means to pursue fertility options with less concern about the related financial burden.

Financial Wellness and Stress

Employers concerned with employees' financial wellness also should consider how the cost of fertility treatments effects employees' long-term finances when those treatments are not covered by a health plan. These treatments are expensive and may not succeed the first time, creating additional financial stress.

A 2018 survey by Student Loan Hero, a firm that helps borrowers manage debt, found that among 776 people who plan to undergo some type of fertility treatment in the next 12 months:

• 40 percent reported feeling stressed about the cost of this treatment. That stress is likely to be long-lasting as they pay down the resulting debt.
  

• More than 50 percent planned to use a credit card to pay for this treatment.
  

• 25 percent planned to use a personal loan.
  

• 14 percent expected to withdraw or borrow the money from their 401(k) plans.
  

Reducing High-Risk Pregnancies

Given the high cost of fertility treatments, some who are paying out of pocket for these procedures will try for a multiple pregnancy to avoid the cost of another round of treatment. This can increase the cost for employers who exclude fertility treatments from their health coverage.

"The biggest driver of multiple embryo transfer is cost," said Sun. "If they have two viable embryos, they often implant both"—to save the cost of another implantation procedure for a second pregnancy—"which is dramatically more dangerous for both birth mother and child."

Delivering twins and triplets carries a much higher chance of requiring care in the neonatal intensive care unit (NICU), she pointed out. "As most employers know, NICU care is extremely expensive and is very likely to be covered by any employer health plan that offers coverage for employees' dependents."

If an employer offers fertility benefits, however, the cost pressure on employees to transfer multiple embryos will be significantly lessened, Sun said. These benefits also can help to educate employees about treatment alternatives and provide care-management services.

A Long-Term Option

Casselman urged employers to conduct a careful analysis that includes:

• Employee input about what they want and need from fertility benefits.
  

• A clear understanding of employee demographics and how they may impact the demand for these benefits.
  

• A projection of long-term costs.
  

Any employer that decides to offer fertility benefits should do so with a long-term horizon in mind, Casselman advised. "Once in place, it would be very difficult, if not personally devastating to specific employees, to rescind these benefits," she noted.

Joanne Sammer is a New Jersey-based business and financial writer.

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