Having a child is a deeply personal decision, but also a financially impactful one—studies estimate that the average middle-income family will spend $310,605 to raise a child to age 17. In the United States, where you work has a major impact on the cost of starting your family. Here are three employer-sponsored benefits you should review to help estimate how much it will cost you to have and care for a new baby:
Health Insurance
This is a big one! Medical costs can add up fast depending on your coverage. This is true for both conception costs such as fertility treatments and pre-natal care as well as labor, delivery, and post-natal care. Families with large network health insurance pay an average of about $3,000 out-of-pocket throughout their pregnancy and giving birth, not including fertility treatments. For fertility treatments, a cycle of intrauterine insemination (IUI) costs between $500-$4,000 and a single round of in vitro fertilization (IVF) can cost between $15,000-$30,000, so whether that is covered by your insurance will be a major factor in your costs.
Along with finding out what is covered under your plan, you should also pay attention to your deductible—the amount you need to pay for healthcare before your insurance plan starts to cover costs—and your out-of-pocket-maximum—the most you’ll need to pay annually for care covered under your plan. Depending on what you find, you might consider switching plans during your open enrollment or taking advantage of saving through a health savings account (HSA) or flexible spending account (FSA). Additionally, once your child is born, you will need to make sure they are covered under your health insurance which often costs a few hundred dollars more per month.
Parental Leave
Only about one-quarter of employees working in the private sector are offered paid family leave. If your employer offers paid family leave, make sure you know the full details of the time and pay since the length can vary greatly and the pay is not always 100% of your salary. Thirteen states and the District of Columbia now also have paid family leave. If your employer or state does not offer paid parental leave, you may still be able to get some of your pay through short-term disability, which is available to about 43% of the workforce through their employer. Additionally, unused vacation and sick time can often be added on to extend your time off. Stacking time off between you and your partner can save money by delaying the onset of the biggest monthly expenses associated with having kids: childcare.
Childcare Benefits
The dependent care FSA, which allows employees to save pre-tax for childcare expenses, is the most common childcare-related benefit offered by employers. With a dependent care FSA, a parent can have money deducted from their paycheck for childcare expenses like daycare, summer camps, and after-school care and then reimburse themselves from that account. As of 2024, the annual contribution limit to a dependent care FSA was $5,000. Less common childcare benefits include onsite childcare, childcare subsidies, help finding childcare, and backup care benefits.
