The next wave in inclusive family planning support 

The next wave in inclusive family planning support
Sept 28, 2023

As societal and work norms shift, people are pursuing family-building later in life than in past years. Because the ability to carry a healthy pregnancy typically far outlasts the ability to produce healthy, viable eggs, it is possible for people who want to become parents someday to "preserve fertility" by collecting, freezing and storing eggs for later use. As interest in this option has grown, employers have taken note. According to Mercer’s 2022 National Survey of Employer-Sponsored Health Plans, 16% of large employers (500 or more employees) cover elective egg freezing. That figure jumps to 37% for large high-tech employers and to 63% for Fortune Best Companies. 

Fertility preservation is not a new concept; it is standard coverage in health insurance plans for people with planned medical treatment or therapy expected to render them infertile, such as chemotherapy. This type of “medically necessary” fertility preservation coverage has recently expanded to include coverage for people with planned gender affirming treatment, per World Professional Association for Transgender Health SOC-8 guidelines. However, extending coverage to include elective fertility preservation is still relatively new and raises a number of issues. In this post, we’ll discuss how this coverage fits into overarching fertility benefits and practical considerations of cost, benefit design, and compliance.  

Coverage for in vitro fertilization (IVF) has grown rapidly over the past few years. In 2022, 43% of large employers covered IVF, up from just 27% in 2020. Nearly two-thirds of organizations that provide fertility benefits do not require members to have a diagnosis of infertility to be eligible for coverage, which means that same-sex couples and single intending parents may access coverage. By providing coverage for elective fertility preservation services and storage for members without medical need, employers can support employees who wish to delay pregnancy for personal reasons such as anticipated fertility challenges in the future (due to family history or underlying conditions), desire to undergo reciprocal IVF, lack of perceived preparedness for parenting, divorce during critical child-bearing years, or the need to focus elsewhere (for example, on a career). 

An expansive fertility preservation benefit can support several business performance indicators that impact the bottom line, such as attraction and retention. Candidates may be more drawn to an organization, and existing employees may be more likely to stay, if benefits support their unique family-building goals. Solutions that administer fertility preservation benefits can also help maintain productivity by reducing time spent researching clinical options and support members through the process; they also help alleviate stress associated with family building within a specific timeline. In addition, offering this benefit can demonstrate organizational values. Mercer's 2023 Health on Demand survey of 2,000 US workers found that the majority of respondents want their employer to support women’s health (71%) and diversity, equity and inclusion (65%). Actively and openly supporting all people on their path to parenthood can resonate with both customers and job candidates 

That said, in deciding whether and how to cover elective fertility preservation, employers must also consider cost, federal regulatory compliance requirements, and administration. 

Cost. According to FertilityIQ , the cost to have eggs collected and frozen is between $8,000 and $15,000, with storage costing approximately $500-$1,000 per year. Their data suggest that approximately 38% of patients who freeze eggs return to use them two to five years later. Employers will want to consider their unique population demographics when designing their fertility preservation benefit to ensure that sufficient budget is available to cover projected utilization. 

Compliance issues. When adding fertility benefits for individuals without a traditional medical infertility diagnosis, compliance with federal law can be challenging. Fertility benefits can be excluded from an employee’s taxable income if considered medical care. Unfortunately, the IRS hasn’t issued formal guidance addressing when fertility treatments are considered medical care, and an inclusive fertility program might cover benefits that can’t be treated as tax-preferred (see this Mercer GRIST for more information). Work with legal counsel, tax advisors and vendors to determine whether and how to tax employees for fertility benefits.

Also consider implications for HSA eligibility, federal transparency and mental health parity requirements for group health plans. For example, if offering a fertility benefit HRA, avoid compromising HSA eligibility by ensuring the HRA only pays benefits after an individual reaches the HDHP deductible (and keep in mind the HRA can only reimburse fertility expenses that are considered medical care). If using a point solution, review whether federal transparency requirements apply and confirm the vendor is prepared to support the plan’s compliance if necessary. Lastly, don’t forget to consider how adding robust fertility benefits to a group health plan’s medical/surgical benefits might affect the plan’s mental health parity compliance.  

Administration. For employers prepared to add (or enhance) a fertility preservation benefit, administration can also pose challenges. For example, some health plan administrators or TPAs may not be able to administer a post-tax benefit or distinguish between medically necessary and elective fertility preservation for taxation purposes. An expansive vendor market exists to support employers looking to enhance fertility benefits, including both broad family building and support vendors as well as more niche solutions that focus on specific components of family building, like fertility preservation. But bear in mind, “carving out” administration of the fertility preservation benefit or the entire fertility offering from the group health plan to a specialty vendor can come with its own compliance challenges.  

As with any new benefit, it’s important to evaluate employee priorities, cost implications, design options, compliance issues, and communication needs. The most important consideration may be that while fertility preservation is only one component of a broader women’s health, family support, or DEI strategy, it can make a big difference in the lives of members who choose to use it. 

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