Birth rates rose for women in their late 30s and early 40s and declined for women under 35 in 2018, according to the Centers for Disease Control and Prevention data released last week, adding that the U.S. saw the lowest number of births in 32 years.
With women and men postponing family plans for their careers, companies and law firms are adding specialized fertility benefits to retain employees who may seek opportunities elsewhere when they need those benefits. But the startups helping corporate legal departments add these benefits are also starting to build their own legal departments amid industry growth.
The average health insurance package may have limited coverage or no coverage for fertility procedures such as egg freezing and in vitro fertilization unless they’re medically necessary. Due to variations, fertility coverage startups partner with companies through offering a network of fertility providers to lower the traditionally high costs to employees and let employees without health conditions access procedures such as egg freezing.
Less than a year old, Kindbody is a network of providers and fertility specialists that holds informational events in New York, where it’s based, and Los Angeles, many times in its branded yellow-and-white mobile clinics. Its network offers intrauterine insemination, IVF, egg donor support and egg and embryo freezing to individuals and employers.
“We are directly contracting with employers to really cut out the broker and the middleman because we are the provider itself,” said Shilpa Patel, senior vice president of legal and business affairs at Kindbody. “Most insurers are self-insured, and they typically carve out fertility benefits. Fertility benefits can be included in the employer’s medical benefits, through whatever plan administrates their coverage, or they’re carved out and offered on its own to employees and dependents of these employees.”
The fertility industry is valued at $5.8 billion, according to U.S. Fertility Clinics & Infertility Services, and venture capital firms are eyeing the industry. The CDC defines infertility as a woman not being able to get pregnant after at least one year of unprotected sex.
“There will be companies like us out there because there’s a demand,” Patel said. “Statistics are one in eight couples have fertility issues. More and more women are electing to egg freezing. If that grows—and it’s already growing—other companies out there will add it as a covered benefit, making it more acceptable and bringing down the costs.”
Employers that do cover services such as IVF may cap that coverage at $25,000, for example, but most women use over two IVF cycles priced around $60,000 to achieve a successful pregnancy and delivery, according to FertilityIQ.
Progyny works with companies such as PayPal to add fertility services to their health benefits packages. Jennifer Bealer, senior vice president and general counsel of Progyny, said the company’s in-house legal department works with the benefits and implementation departments in the client enrollment process. Employers and individual employees invite Progyny to their offices for workshops. Bealer, a mother of two children, said this shows the shift in the marketplace with employees sometimes making the first contact and convincing employers to learn about full fertility coverage.
“It’s that companies are starting to realize that family building and benefits are essential; they’re not just an ancillary perk,” Bealer said. “Fertility preservation is a form of preventative medicine for many women. We’ve had employees burst in tears at enrollment events asking for Progyny.”
Progyny and Kindbody are based in New York, along with competitors such as Celmatix, where Gov. Andrew Cuomo last year announced his administration’s focus on women’s health by directing the state’s Department of Financial Services to find ways to make IVF and fertility preservation coverage more affordable and accessible. This year, as a result of the agency’s results, Cuomo introduced a bill that would mandate large group insurance providers in New York to cover IVF and all insurance providers to cover egg freezing services for women with certain health conditions, including those undergoing cancer treatment.
Massachusetts, New Jersey and Illinois are some of the states that have laws supporting the expansion of infertility coverage with most emphasizing that services should not have superfluous costs to employees.
As states pass legislation expanding infertility coverage, more corporations have embraced fertility benefits while law firms are slowly moving in the same direction.
“Progressive companies like Facebook cover elective egg freezing in addition to traditionally covered infertility benefits,” Patel said. “Law firms are behind. Fortune 500 companies are looking to improve fertility benefits because it’s the right thing to do and it’s a talent acquisition and retention tool.”
Leslie Anne Tessitore, director of benefits at Cleary Gottlieb Steen & Hamilton, said employees at the law firm voiced an interest in holistic fertility benefits.
“We wanted to enhance and modernize our fertility coverage to speak to the needs of a changing workforce and to better align with our culture and the firm’s commitment to providing an inclusive and supportive work environment,” Tessitore wrote in an email to Corporate Counsel.
The firm’s program in conjunction with Progyny went into effect this year, so Tessitore said the impact is difficult to quantify so far, but employees supported the gesture.
“The initial feedback has been quite positive,” she wrote. “We hope that it underscores our commitment to providing our people with a first-class suite of benefits, and that it supports our continuing focus on attracting and retaining the best talent by offering an exceptional employee experience.”
The firm also offers surrogacy and adoption assistance programs with paid leave of 10 weeks for all parents and 18 weeks for birthing parents; Maven, which also offers fertility benefits on top of maternity support and family benefits; and Milk Stork, a breast milk transportation and delivery service. She said the firm has backup emergency child care and two new lactation rooms.
In the legal industry, the average size of fertility benefits sits in the middle compared to other industries at $60,000, according to the latest data from FertilityIQ examining the 2017-2018 year. The data looks at 15 law firms, mostly Am Law 100, with Ropes & Gray confirming it offers unlimited cost coverage for unlimited IVF cycles.
Perkins Coie sat in the middle with covering $50,000 of IVF cycle treatments during that time period but, according to a representative, now as of 2019 works with Progyny to offer employees three “Smart Cycles” with the benefit of around $60,000 if all three cycles are used. Progyny markets its “Smart Cycles” as having the patient use the most effective procedure the first time to avoid exhausting coverage too soon.
Though the technology industry usually has lower benefits at $27,600, the benefits are adopted by the highest number of companies than any other industry, the data noted. The degree to how many law firms has adopted the benefits was not captured by the data.
With more companies and law firms adding fertility benefits, more fertility benefits providers may be born. And the ones already in existence could see larger legal departments. Patel is the sole lawyer at Kindbody, while there are three lawyers at Progyny.
“We’re happy to see increased demand for coverage so what that means is that our company is growing exponentially and the legal department is growing exponentially along with the company; our department will expand,” Bealer said. “Our legal team is always getting ahead of what the next thing will be.”