Fertility coverage is a popular employer benefit. Could Alabama’s embryo ruling change that?

By Tami Luhby, CNN

(CNN) — Alabama’s Supreme Court ruling that frozen embryos are children could have an even greater impact on would-be parents in the state — and elsewhere if other states follow suit — than it would have just a few years ago.

That’s because more employers are providing fertility benefits to their workers, opening up the costly procedure to many more Americans.

Already, several Alabama clinics have paused certain in vitro fertilization procedures in the wake of the ruling, prompting some patients to look for alternative care in other states. While it’s too soon to tell how the court decision will affect employer benefits, it’s possible that some companies will have to cover more travel expenses to enable their workers to get treatment in other states.

Expanding coverage

One round of IVF can cost more than $20,000, and patients often undergo more than one cycle, according to FertilityIQ, an online site that provides education and reviews of doctors and clinics. But patients are increasingly getting help picking up the tab.

Some 45% of large employers covered IVF. in 2023, up from 22% four years earlier, according to a survey by Mercer, a consulting firm. The majority of those with 500 or more workers don’t require a diagnosis of infertility, which expands the benefit to same-sex couples and single people who want children.

However, most employers place limits on IVF coverage. Just over half have a lifetime benefit maximum, with the typical limit being $20,000. About a quarter have a limit on the number of cycles — typically three.

Looking at employers of all sizes, 30% covered IVF treatments in 2022, up from 13% in 2016, according to the most recent survey from the International Foundation of Employee Benefit Plans. Some 28% covered fertility medications in 2022, up from 8% in 2016; and 14% covered egg harvesting/freezing services in 2022, up from only 2% in 2016.

The share of employers providing fertility benefits has likely increased since 2022 for several reasons, said Julie Stich, the foundation’s vice president of educational content.

“There’s definitely more awareness of these types of benefits and that employees are looking for them,” she said. “As with any type of employee benefit, this is a good attraction and retention device.”

Fertility benefits can also boost employers’ diversity and inclusion efforts since same-sex and transgender couples, as well as single workers, can take advantage of it, Stich said.

Plus, if workers have to pay for the entire cost themselves, they may take chances to improve the odds of viable pregnancies, such as implanting multiple fertilized eggs, she said. This could lead to health complications, premature births and other issues. Some employers are providing fertility coverage to prevent these situations.

Many states also require varying levels of fertility insurance coverage, though the mandates do not apply to employers with self-insured health plans that pay their workers’ medical claims.

Some 21 states, plus the District of Columbia, have passed such laws, as of September, according to RESOLVE: The National Infertility Association. Fifteen of those laws include IVF coverage.

Alabama decision

Despite the Alabama ruling, employers are not likely to drop their fertility benefits since they are important for talent acquisition and retention, said Kate Ryder, founder and CEO of Maven Clinic, which works with employers and health plans to provide fertility and family building programs, among other services.

Clients of hers who are based in Alabama or have workers there are in a “wait and see mode,” she said. State lawmakers are looking to protect IVF treatments, and the state attorney general has indicated he will not prosecute IVF participants or providers.

“No one’s rushing to anything right this second because there’s still so much gray area,” Ryder said.

If the ruling leads to fewer Alabama clinics providing fertility treatments, employers may need to add or improve their travel coverage so their workers can access care in other states, said Harvey Cotton, who advises employers in benefits administration as a principal at Ropes & Gray law firm.

The decision is raising similar questions as the US Supreme Court’s 2022 ruling allowing states to ban or severely restrict abortion, which prompted a number of companies to say they would cover employees’ travel to states that permit abortion.

“The plan could offer coverage, but there may be no providers able to provide it in light of the concerns they have because of the decision,” he said of the Alabama ruling.

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