People who want to have a baby in the U.S. can expect to cough up around $2,743. That’s the average out-of-pocket expenses for women enrolled in an employer health plan, according to the Peterson-KFF Health System Tracker. For many working-class families, that’s too much, especially when adding in all the diapers, baby clothes, car seats and other expenses that come with a new baby. But what if employers could offer coverage for babies with no out-of-pocket costs?
It’s possible. It’s also a game changer.
The Business Case for Better Childbirth Coverage
The American Family Survey found that 43% of Americans cite insufficient money as a barrier to having children.
It starts before the baby is even born. Prenatal care and child delivery are expensive, and even people with health insurance can struggle to afford the out-of-pocket costs – and that’s assuming the pregnancy and delivery go well with no serious complications.
This is a problem for people who want to start families. It’s a problem for societies that want people to be able to raise the next generation without going into debt. It’s also a problem for employers trying to support a happy, healthy and productive workforce.
Employers are in a unique position to help solve this problem. There’s also a strong business case to be made for offering employee health benefits that include coverage for delivery with no out-of-pocket costs because this kind of coverage is a powerful recruitment and retention tool.
For people who want to have children but worry about costs, employee health benefits that cover pregnancy care and childbirth with little to no out-of-pocket costs are a huge draw. According to Maven, 69% of employees have taken or have considered taking a new job to get better reproductive health benefits. If you’re offering great child delivery benefits, you can attract workers looking for this medical coverage. If you’re not offering great child delivery coverage, you may lose your best workers to employers who are.
How Employers Can Offer Free Child Delivery Benefits
It’s one thing to argue that employers should offer great employee benefits. It’s another thing to show employers how they can do so affordably.
Health insurance isn’t cheap. Employers are already spending a huge and growing portion of their employee compensation budget on health benefits. Adding more may not seem financially feasible – but for many employers, it is.
You just have to be willing to break away from traditional, carrier-controlled health plans.
Here’s how to do it:
- Drop your carrier-controlled health plan and go for self-funding. Don’t assume your company is too small for this option. Companies with as few as 20 employees may be eligible.
- Ditch the carrier-controlled networks and contract directly with the healthcare providers in your community. They want what you want: to remove barriers to healthcare so workers can afford to get the care they need.
- Now that you control your health plan, design it how you want – and yes, that can include free babies.
It’s a big change, and it takes some work to set everything up, but once you get it all in place, the savings can be huge. We’re talking more than 20% average first-year premium savings, with average premium increases of less than 2% in years two through four. Employees save, too, with an average reduction of 90% in out-of-pocket costs.
But What If Your Workers Don’t Care About Reproductive Benefits?
Free babies are great, but not everyone is going to get excited about it. Some people already have children, or they don’t want children, so child delivery with no out-of-pocket costs won’t sway them one way or another.
That’s OK. You can offer them other benefits that will sway them.
That’s the whole beauty of a self-funded direct health plan. You’re in control of the benefits, so you can design coverage in a way that meets the needs of your workforce. You’re also saving money, so you have the financial flexibility needed to invest some of that savings back into your employee benefits program. Options include telehealth, better preventive care, or bariatric surgery. The plan is yours, so the choices are yours.
What Would a Direct Health Plan Mean for Your Workers?
Right now, employers and employees are struggling with the high cost of healthcare. Unless employers are willing to take bold steps and enact real change, it doesn’t look like this is going to improve. In fact, the situation just keeps getting worse.
With a direct health plan, you can take control of your employee benefits and tailor your coverage in a way that promotes employee well-being. Free babies are just the beginning.
Health2Business helps brokers and employers leverage direct health plans. See how it works.
