Oct 11, 2022 - Health

Employers expand reproductive health benefits amid tight labor market

Illustration of a briefcase with the lock in the shape of the female symbol

Illustration: Sarah Grillo/Axios

A growing number of employers are expanding health coverage to in-vitro fertilization, surrogacy and other sometimes pricey fertility services in order to compete in the tight labor market amid heightened awareness of women's health.

Why it matters: An estimated 1.1 million women left the workforce during the pandemic, accounting for more than 63% of jobs lost, per Harvard Business Review. And the overturning of Roe v. Wade has scrambled the calculus for job-based reproductive health coverage.

Driving the news: Walmart, the largest private employer in the U.S., recently announced that it is adding family-planning benefits — coverage for IVF, surrogacy and adoption — for its workers.

  • "This is a catalyst for the democratization of care," said Annbeth Eschbach, CEO of Kindbody, the family-building benefits company that Walmart partnered with. "Fertility benefits have joined medical, dental, vision, as a standard."

Zoom out: Amazon, the second largest employer in the country, has been offering fertility benefits to all U.S. non-seasonal part-time and full-time employees through a partnership with Progyny, a fertility benefits provider, since 2019, according to a company spokesperson.

What they're saying: The moves suggest that "family-building benefits or reproductive health benefits are not restricted to just white collar companies," said Jean Abraham, a health economist at the University of Minnesota.

The big picture: After the Supreme Court overturned Roe v. Wade, Walmart, Disney, Meta and a number of other big employers said that they would help employees living in states with abortion restrictions access reproductive health options, including paying for travel expenses.

  • The heightened focus on reproductive health is motivating employers to also consider also providing fertility and family-planning benefits, some of which were once deemed too costly, said Julie Campbell, a principal consultant in Mercer's total health management practice.
  • Coverage options are also expanding to pre-conception counseling, egg-freezing, menopause and postpartum care.

While benefit design is still evolving, "it's coming up more and more that companies are evaluating that as an offering. We are hearing clients talk a lot about that and seeing companies rise up and offer solutions in that," United Healthcare's chief growth officer Brandon Cuevas told Axios' Tina Reed.

  • Employers in some cases are striking partnerships with benefit providers like Maven and Progyny while UHC offers some of the back-end analytics to help them better understand their return on investment in the space.

State of play: Industry experts say that companies are aware that offering these types of benefits improve employee retention rates and attract new talent.

  • Companies are able to recruit and retain a "diverse workforce," said Roger Shedlin, CEO of WINFertility, a fertility benefits company.
  • Mercer's Campbell said adding family-planning helps recruit and retain workers, and can support LGBTQ couples that rely on fertility treatments and other services to start a family.
  • Companies want to "offer the same opportunities to all of their employees to create the family that they want," Campbell said.

Between the lines: Support for family-planning benefits remains high.

  • 59% of employers say that fertility coverage is necessary to compete in the labor market, according to Barclay’s 2021 Healthcare Disruptive Series on the FemTech industry.
    • 68% of adults would switch jobs for better fertility benefits, per data from Barclays.

By the numbers: Adding family-planning benefits would account for a 1.3%-6% increase in annual medical spending for companies with 30,000 or more workers, according to estimates from Mercer provided to Axios.

  • Zoom in: Pete Anevski, CEO of Progyny, told Axios that among its company clients, family-building benefits represent 1%–3% of their overall medical spend.

Don't forget: The costs of fertility benefits vary.

  • Benefit consultants take into account a company's demographics — number of employees, age range, gender distribution — to determine what offerings fit best.

What we're watching: The employers' focus is widening to ways to make pregnancy safer for women amid concerns about rising maternal mortality.

  • Nearly 85% of large employers will implement at least one strategy, like expanding fertility benefits, ensuring coverage of prenatal care or postpartum depression, by next year, a Business Group on Health survey of large employers found.
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