Rethinking long-term parental benefits and well-being

The journey to parenthood is as unique as the people embarking on it. Becoming a parent is a transformative experience that impacts our mental, social, and financial well-being. Yet, for far too long, this journey has been viewed as a one-size-fits-all, linear path. The reality is that it's often more financially burdensome than we think. Despite the magnitude, family-forming solutions and childcare support are largely funded out-of-pocket.

As societal norms shift, new technologies emerge, and family formation changes — both in terms of the family structure itself, as well as how people form their families — employers have an opportunity to reshape benefits, embracing an empathy-first approach that supports a broad spectrum of prospective parents. 

The need to reshape parental benefits has heightened, as the largest investment in childcare in U.S. history expires this September. Funds from the $24 billion disbursed as COVID-19 relief to childcare providers through the 2021 American Rescue Plan Act will dry up, potentially disrupting stability for three million children and their families. It's an opportune moment for employers to evaluate the role they play in supporting their working parents and rethink what they can do to optimize their benefits spend while enabling better outcomes and possibilities for their workforce.

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Breaking the traditional mold
Traditionally, the route to building a family has followed a linear trajectory, often isolating individuals and couples who must navigate the complex terrain of benefits decisions, including but not limited to fertility treatments, adoption, or surrogacy. Having to make decisions around these expensive, emotionally burdensome methods disproportionately impacts women and LGBTQ+ couples, particularly considering the financial implications of these paths to parenthood. Experts estimate that the average cost of surrogacy in 2023 can reach $200,000 or higher. Egg-freezing patients can spend an average of $30,000-$40,000 on treatments and annual storage fees, according to FertilityIQ, a fertility education and support company. When considered against the financial realities of those most likely to need family support, the urgency for employers to support a broader spectrum of prospective parents becomes clear. 

This begins with recognizing the many paths to parenthood, the financial impacts of these various paths, and the role employers have in shaping their employees' lives and career choices. This is mutually beneficial for the employers as well: According to 2018 AICPA research, 80% of employees would choose a job with benefits over an identical job that offered 30% more salary but no benefits. Equitable well-being and benefits, inclusive of long-term parental benefits, can help organizations distinguish themselves as employers of choice. 

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Equity in benefits, empowerment in choices
The interplay between work and parenthood is intricate, deeply personal, and costly. In the United States, there are no federal, nationwide standards for paid family and medical leave, leaving the majority of workers with a patchwork of support and back-up care. Roughly 23% of workers have access to paid family leave, according to the Bureau of Labor Statistics in 2021. While some strides have been made, such as the Family and Medical Leave Act (FMLA), the holistic financial support needed to navigate the challenges of family planning, fertility treatments and adoption is not yet there.

This is where employers can make a difference — and they are starting to catch on. Recognizing that benefits go beyond compensation, companies are reevaluating their offerings to encompass fertility and family-forming benefits. According to an International Foundation of Employee Benefit Plans (IFEBP) survey in 2022, 40% of U.S. organizations currently provide fertility benefits, an increase from 30% in 2020. For families seeking to adopt, 34% of organizations offer paid adoption leave, 22% offer unpaid adoption leave, and 19% offer financial assistance with adoption. 

Strides have been made to normalize the many paths to parenthood and alleviate some of the financial burdens associated with them, but there is still more work to be done.

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A holistic approach to well-being and a call to empathy
The journey to parenthood is oftentimes siloed from the many lifestyle factors that are implicated in the process. Those on the path of anticipatory parenting should consider this milestone inclusive of financial well-being, which requires an informed, intentional approach along with guidance from financial professionals where appropriate, to ensure prospective parents can protect what matters most and that their financial strategy is aligned with this new chapter. 

This is especially important for women, as the wage gap, student loan debt, and caregiving responsibilities disproportionately impact women and converge to create unique barriers to well-being. According to New York Life's Wealth Watch survey in 2023, women are more likely to report that parenting is harder in four key areas compared to men: financially (73% compared to 66% of men), emotionally (74% compared to 61% of men), socially (67% compared to 56% of men) and physically (64% compared to 60% of men). 

To address these challenges, employers can proactively reshape their well-being and benefits programs and embrace the diversity of families. By integrating comprehensive financial guidance and education, facilitating access to financial solutions that adapt to family-formation and childcare decisions and supporting employees through life transitions, organizations can thoughtfully guide individuals to confidently embrace family planning while pursuing their career aspirations. Equipped with the tools to manage life events and navigate comprehensive benefits, employees can be more present in their personal and professional lives, contributing to a more engaged and healthier workforce.