The world of fertility benefits pricing is racing to keep up with evolving ideas of family building and fertility care. Employees expect their unique journeys to be covered, but their benefits often fall short on paths outside of IVF. That’s why it’s vital to understand two of the main pricing models that exist today for fertility care, and how they compare to each other.
A cycle-based benefits model bundles fertility services as part of a treatment cycle. Employers elect to offer a certain number of cycles as part of their benefit, and each treatment or service is valued as a portion of a cycle: ⅛, ¼, ½, et cetera.
Why the cycle-based model was created
This approach to fertility coverage rose in popularity over 20 years ago. Back then, in vitro fertilization (IVF) was the primary focus of fertility care: a revolutionary therapy that happens in cycles. It made sense for pricing models to be built around the IVF process.
The pros of cycle-based pricing
Familiarity: The cycle-based model has been around for over 20 years. This means most benefits providers — and some employees — feel more comfortable with its structure and believe they understand it better than other options.
No monetary value: With this model, services are bundled by cycle, not by price, so on the surface, this model feels all-inclusive and straightforward. (However, cycle costs vary from vendor to vendor, which can make it difficult to predict actual costs and can lead to exceeding the benefit budget.)
The cons of cycle-based pricing
More costly: There are a number of low-cost fertility options that can help someone get pregnant without IVF or limit the number of IVF cycles it takes. Cycle-based models don't always include education for these alternate paths to pregnancy. Without upfront information about their options, employees can unintentionally jump to IVF and use more treatment cycles. That means more costs for employers — and more revenue for the administrator.
Less inclusive: “We’ve always done it this way” usually excludes people, and benefits pricing is no exception. There are many ways to build a family that doesn’t fit neatly into a cycle-based model: gestational surrogacy and adoption, for example. Shoe-horning these options into an outdated model can be frustrating—and othering—for employees on family-building journeys beyond IVF.
Less equitable: Companies locked into a cycle-based model tend to offer richer fertility coverage for IVF than they do for adoption and surrogacy. Employees notice this inequity, which can mean a drop in their happiness and a rise in business recruitment spend. According to our research, 65% of today’s workforce will consider leaving their job for better fertility coverage.
More rigid: Employers today ask for more flexibility across the benefits suite, including fertility care. That’s why there’s been a rise in requests for a pricing model that’s more agile than cycle-based.
More confusing: It can be hard to understand how different services add up in a cycle-based model, versus having a clear amount of money to spend as needed. Plus, some cycle models don’t factor in at-home tracking and testing or services like milk shipping, childbirth classes, and more.
What is flat-dollar fertility benefits pricing?
With the flat-dollar benefits model, employers agree to cover eligible fertility services up to a certain amount without confusing cycles or focusing solely on IVF. This approach usually includes an annual maximum or a lifetime maximum. The benefit can be adjusted over time based on evolving needs.
Why the flat-dollar model was created
The way people build their families has evolved immensely in a generation. While the cycle-based model was a great fit 20 years ago, when IVF was the focus, it hasn’t kept up with the times.
Carrot uses a flat-dollar model to offer employers a more equitable, inclusive fertility benefit for their teams. Plus, our model is 100% transparent, with no hidden fees or revenue share around care.
The pros of flat-dollar pricing
More inclusive and equitable: A flat-dollar model can be leveraged for all fertility journeys, not just IVF. That means adoption and gestational surrogacy, but also paths outside of family building like menopause, low-T, and gender-affirming therapies.
More affordable: Carrot offers members a wealth of medically vetted information upfront, which can help them make more cost-effective decisions. In fact, 60% of Carrot members choose less-invasive fertility interventions when possible instead of jumping straight to expensive IVF cycles.
More flexible: The path to family building is rarely a straight line. In a cycle-based model, members are “locked in” to a specific journey; with a flat-dollar maximum, it’s easy to switch paths and still receive the financial support they need.
Easier to understand: When everything is expressed in dollars, not fractions of a cycle, both members and benefits teams have an easier time understanding how payment for fertility services works. Plus, it’s easier to use the funding on at-home care (sperm testing, ovulation tracking) and other services (milk shipping, childbirth classes).
The cons of flat-dollar pricing
The learning curve: The flat-dollar model for fertility benefits pricing is relatively new. A lack of familiarity might make this model seem more complicated, but it’s the more straightforward choice of the two options. For instance, “cycles” often defy logic, with less costly procedures sometimes using up more cycles than expensive ones. This can be confusing for providers and members alike.
Cycle-based vs flat-dollar: Which fertility benefits model is right for your business?
One thing is for sure: benefits coverage isn’t one-size-fits all. And while we might be biased, we think the flat-dollar model is a better fit for more people in the ever-evolving landscape of fertility care.
Carrot’s modern, flexible, flat-dollar approach allows a more diverse group of members to access financial coverage — while giving employers the peace of mind that care is managed, high-quality, and medically appropriate. It takes the guesswork out of managing cycles and provides members with high-quality resources to make informed decisions for themselves, their family, and their wallets.
Within Carrot’s platform, members see real-time spend tracking in dollars, not cycles, for better transparency and cost management. For example, in the Carrot portal, members can easily see their available funds for the year and lifetime as soon as they log in:
As members use their benefit, the amount shown as available in their portal is automatically updated. Plus, if a member switches journeys — e.g., moving from a fertility journey to an adoption journey — the amount of financial support they have is reflected in the same way.
Fertility benefit administration is so much more than dollar signs; it’s about the people who use these benefits, and the delicate nature of the journeys they’re on. That’s why it’s so important to examine the ins and outs of pricing models before making a decision for any team. We’re here to help.
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