Readers of this magazine are well versed on the challenges of the Great Resignation, which has seen an estimated 24 million or more American employees leave their jobs between April and September 2021. Such disruption creates challenges for companies, but savvy leaders understand the opportunity to differentiate their company by adopting creative solutions. One proven path is to creatively use enhanced benefits to recruit and retain top talent. This article will discuss family-building benefits, which are among the benefit enhancements most coveted by today’s workforce.
The Great Resignation does not evidence sloth or malaise, but reflects an energized workforce that is willing to make changes in order to find the work-life balance they deem most desirable. For many, the most critical goal is to find work that does not make them feel they must choose between career and family. An employer that offers family-building benefits shows it understands these concerns, and is supportive. That is why family-building programs are a clear winner for employers of today’s workforce. In fact, the number of companies offering them is growing so rapidly that they will likely be a universal benefit within 5 years.
Trends in Family-Building Benefits
Fertility benefits provide coverage or reimbursement for family-building services. Without a benefit, IVF treatment can cost an employee nearly $30,000 per cycle. Surrogacy costs can range from $90,000 to $130,000. Those who opt for adoption might pay $50,000 in the U.S. Given these high costs associated with family building, a managed fertility benefit is an attractive perk.
In some states, mandates require that fully insured group health plans cover infertility treatments, such as IVF treatments and medications. Even there, employers are increasingly offering supplemental programs to help employees obtain genetic testing, egg freezing, adoption, and surrogacy. Employers in states without mandates, as well as those providing self-insured health plans, are adopting programs that voluntarily add all of these benefits. Some employers offer an unlimited dollar coverage for family-building, but more typically implement programs with a single lifetime maximum benefit limit, in which a specific dollar amount covers anything from fertility treatments, medications, egg and sperm freezing adoption and surrogacy.
Even before COVID, the International Foundation of Employee Benefit Plans observed in 2019 that the rise in company-offered fertility benefits is part of a greater increase in family-friendly perks among U.S. employers. Managers of family-building and fertility benefits have observed that financial, legal and technology employers – sectors that rely heavily on talent in their prime family-building years – were early adopters of family-building programs. And once a few firms offered programs, not only did others in their industry quickly follow suit in order to keep up, but companies in manufacturing, retail and other businesses noticed and joined the trend.
Family-building Benefits Are Attractive to a Wide Array of Workers
Health plans typically limit coverage to those meeting the legal definition of infertility, typically requiring (among other criteria) failed attempts by a couple to achieve pregnancy over a period of time. Because this legal definition excludes same-sex couples, and possibly single persons as well, from qualifying for covered benefits, many companies are voluntarily moving to inclusive benefits that allow all employees the equal ability to build their families. For example, there has been a significant jump in the number of employers offering surrogacy and adoption, which are the primary family-building benefits used among the LGBTQ+ community.
While most health plan coverage is structured to aid employees who are actively seeking to have children, many ignore those who want to preserve their fertility. This is a significant omission that employers are increasingly realizing they must address. For example, some women juggle hesitancy to begin a family during the period of career ascendency with anxiety that delay may decrease their likelihood of achieving pregnancy at the desired time. Similarly, patients of either gender with certain cancers or other conditions may face treatments that could impact their future reproductive capabilities. For these employees, a benefit providing fertility preservation (egg or sperm freezing) is a game-changer.
Managed Benefit vs. an Unmanaged Benefit
One aim of all family-building benefits is to help employees cover the costs of the services they require. The impact for both employees and the employer is vastly improved when a program incorporates management by clinical experts, who help educate, guide and support employees through the often-stressful process of growing a family. When fertility benefits are not managed, employees navigate their own path through a complicated fertility care environment. This increases stress, and adversely impacts employee productivity and absenteeism. In some scenarios, it leads to incorrectly choosing treatments with significantly higher complication rates. For these reasons and others, when employees spend company-provided funds at their own discretion, without professional guidance on the most efficient and productive way to use those funds, the total cost of claims dramatically increases.
With a managed fertility benefit, companies achieve more successful outcomes by eliminating wasteful spending. Employees are connected to clinical experts who guide the employee through their own personal family-building journey. These clinical experts recommend the most appropriate network doctors, medical treatments and lowest-cost medications. They can provide nutritional guidance. And they can also assist employees who may benefit from behavioral support throughout the family-building process. These features of a managed benefit reduce medical costs to the employer and employee, and leave the employee confident they have chosen the best path along their journey.
Better Outcomes and Cost Savings
A managed benefit increases the likelihood of healthy, full-term singleton babies. This is because managed programs provide clinical oversight that minimizes the pursuit of modalities that result in twins, triplets or other high-order multiple gestations, which often result in preterm births. An employee going through fertility treatment with an unmanaged benefit is more likely to have such multiple gestations, an outcome often accompanied in the short run by NICU admission and expenses, as well as significant long-term healthcare issues and costs. More than 20 percent of twins and 80 percent of triplets are born prematurely and require NICU care. Research shows that an average NICU admission can have a 20-day length of stay and cost between $40,000-$80,000. No parent wants to see their neonate in the NICU, and any employer would choose to avoid these costs. A managed benefits significantly reduces these unwanted outcomes.
Management provides a similar positive impact on pharmacy costs, which can account for upwards of half of the overall fertility spend. A fertility benefit program with clinical oversight ensures the dispensing of only appropriate medications and quantities. When patients are educated on pharmacy dosage, storage, and medication side effects, it helps the employees maximize their fertility medication benefit, while wasteful overspending is effectively eliminated.
The Time To Add Family-building Benefits is Now
With the Great Resignation, the trend towards companies offering family-building benefits has accelerated, and is spreading rapidly among national and international firms in many industries. Within five years, it is likely that the need to address employees’ family-building needs will make fertility benefits a standard offering, much like the universal coverage we now see for behavioral health.
Companies that fail to add family building to their benefit portfolios will fall behind in the race for top talent. In addition to the immeasurable benefits that come from offering a family-building benefit, employers that offer clinically managed programs will eliminate wasted benefit dollars, while also improving the quality of care and reaffirming a commitment to supporting employees and their families.
For employers, the incentive to retain their most valued employees has only grown since the onset of the global pandemic. Mental and emotional health became a focal point for expanded workplace benefits, earning a place alongside medical, dental and vision as standard offerings. In the coming years, family-building benefits will enjoy a similar rise in popularity ― no longer an option, but standard practice among the most successful companies in a variety of economic sectors.
Written by Dr. Roger Shedlin, M.D., J.D.
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