fertility benefits

The Rise of Fertility Benefits at Work

Neil Davey

Neil Davey is a student at Harvard Law School and a member of the Labor and Employment Lab.

The demand for workplace fertility benefits is on the rise, with close to 90% of those experiencing infertility willing to change jobs solely for the benefits. At the same time, companies that hope to remain attractive to employees in a tight labor market have increasingly been providing these benefits for employees. For example, the rapidly growing fertility-benefits provider Carrot has 6,100 clinics around the world to provide egg/sperm donation and freezing services, assisted-reproductive technologies, and even adoption assistance for employees of subscribing employers. It stands by the premise that fertility benefits attract employees by reducing their financial burdens, and many other companies have similarly been scrambling to get ahead of the ongoing “Great Resignation” by improving their fertility benefit offerings.

Notably, only 15 states require insurance companies to cover infertility diagnosis and treatment, putting the burden largely on employers. Given the obvious need to compete for talent, the business case for such benefits — particularly for larger employers — is quite strong. Providing fertility benefits has been shown to increase diversity in the workplace, and studies have demonstrated that employees receiving such benefits are less likely to leave. While the increase in fertility benefits is undoubtedly good for employees, the distribution of these benefits has been quite uneven, with those in higher-paying jobs receiving these benefits, while those in lower-paying jobs are often left behind.

In 2014, Silicon Valley giants Facebook and Apple first announced that they would cover a major fertility benefit for all employees: egg freezing. With a single procedure costing up to $10,000 out-of-pocket, Apple’s workplace benefit covered up to $20,000 for both the procedure and storage costs. While this fertility benefit was rare at the time — with only 6% of large employers (those with more than 20,000 employees) providing egg freezing in 2015 — nearly 20% of large employers provide egg freezing as of 2020. Use of other fertility benefits has also increased: the number of large employers paying for in vitro fertilization (IVF) has gone up from 36% in 2015 to 42% in 2020. Importantly, IVF treatment can cost upwards of $25,000. Thus, this workplace benefit can be a huge boon to employees who would otherwise have to spend exorbitant sums of their income to bear children.

Additionally, such benefits have significant positive impacts on diversity and inclusion in the workplace. A 2020 study showed that 88% of women who had IVF paid for by their employer chose to return after maternity leave, compared to just 50% of the population without these benefits. Further, since many LGBTQ+ individuals plan to use assisted reproductive technologies at some point to expand their families, IVF benefits can also encourage LGBTQ+ employees to join the workplace in the first place.

After all, as fertility benefits company Maven Clinic found, 61% of employees who received fertility coverage from their employers felt more loyal and committed to them. And given the recent spike in the provision of these benefits, 70% of millennials said they would change their jobs entirely in order to receive fertility benefits. Providing such fertility benefits is clearly a differentiator in attracting top and diverse talent.

Given these strong business advantages, the growth of such benefits in recent years has been quite stark. As one employment law firm partner has noted: “When organizations first started funding egg freezing, it was quite radical and extraordinary, and it’s becoming much more mainstream now.” As the workplace benefits space is now burgeoning with novel startups, many tech CEOs — such as CEO Peter Anevski of the public fertility benefits company Progyny — believe that “[t]hese benefits are no longer a ‘nice to have’ perk, but an essential part of an employer’s benefits package.” With $345 million in venture capital financing in 2021 alone — up 35% from $254 million in 2020 — the fertility benefits market is expected to reach $41 billion by 2026. Combined with a fall in the U.S. birth rate by 20% since 2007, and one in six couples seeking infertility treatment, the fertility benefits startup space has found the perfect market with demand from both talent-seeking employers and treatment-seeking employees.

But these benefits have certainly not been without controversy. Critics have argued that fertility benefits are actually a “major weapon in the war for talent,” as employers want to not only attract employees but encourage them to delay family planning. By subsidizing egg freezing to delay pregnancy, for example, employers can benefit from employees working through their most productive years. Questions remain as to whether employees at companies that provide egg freezing who do not use it will be discriminated against. Thus, opponents have maintained that pregnancy deferral only perpetuates the “hustle culture of certain fast-paced industries,” though data around what employees ultimately want seems to support the provision of these benefits. 

Unfortunately, while workplace benefits have greatly improved economic equity for employees within firms, there is an uneven distribution of such fertility benefits between companies. For the most part, larger firms in higher-profit sectors (e.g., Big Tech, Big Pharma, financial institutions, law firms, and consulting companies) have adopted these changes, while those in lower-profit sectors have lagged behind. Furthermore, smaller employers are far less likely to provide such benefits. Specifically, while 38% of large employers provided IVF and 19% provided egg freezing in 2020, these numbers were 28% and 11% for smaller employers, respectively. The provision of workplace benefits thus disproportionately benefits higher-income individuals who tend to be clustered in larger firms.

In sum, while the rise in workplace benefits has seemed dramatic, this is likely true only for a relatively small portion of the American population. To address this, it is ultimately necessary to statutorily require employers to provide fertility benefits, much like the ACA did as a first step for other essential health benefits, even for individual and small insurance plans.

But until there is enough support for such legislation, it is important that healthcare benefits startups continue expanding into additional sectors beyond white-collar industries, to cover more lower-income employees. Fortunately, this is slowly beginning to happen. In September 2022, the fertility benefits provider Kindbody — which has clinics nationwide for egg freezing, IVF, LGBTQ+ fertility services, and more — announced its partnership with Walmart. This deal will give nearly 2 million employees at America’s largest employer access to fertility benefits across the United States, including at Kindbody clinics in rural areas. The benefits also include up to $20,000 in lifetime surrogacy and adoption expenses. Until there is a statutory push mandating such workplace benefits at a federal level, it is vital that fertility benefits startups target a diverse set of employers to improve access for a wider array of American employees.

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