March 6, 2020

Pet Insurance: Benefits and Considerations for Employers

by Rachel Shonebarger, Dinsmore & Shohl

Voluntary benefits are an essential way for employers to attract and retain talent. Nearly 70 percent of Americans own at least one pet, and those Americans spent over $17 billion on veterinary care in 2017 alone. Those expenses must be covered by take-home pay – which begs the question: Are employers failing to attract or retain employees who desire greater compensation to help offset such expenses?

Not surprisingly, pet insurance is among the fastest-growing employee benefits. Pets play an essential role in the lives of employees—with the majority of pet owners describing themselves as “pet parents” as opposed to “pet owners.” Given the advancement of veterinary services, the costs of these services are on the rise.

Consider the impact of veterinary costs on Justin Burns, an attorney with Dinsmore & Shohl LLP’s Columbus office and a new “pet parent.” He adopted his goldendoodle, Barrett, when Barrett was eight weeks old, and, almost immediately, Barrett found himself at the veterinarian’s office on a weekly basis. From multiple eye and ear infections, to intestinal problems, to an abdominal surgery to remove a toy Barrett swallowed among other visits, Barrett’s veterinary bills quickly exceeded $5,000 in his first few months as a Columbus resident. Fortunately, Burns had pet insurance – for roughly $1,000 a year in quarterly premiums and a deductible (which covers illnesses, accidents and some routine care), Burns received 90 percent of those vet expenses back.

Burns’ story is not unique. Employees across the country face financial strain due to surprise veterinary expenses. To attract employees, help ease the burden of veterinary costs and stand out among the crowd, employers should consider offering pet insurance as a benefit.

For employers, pet insurance is relatively simple to incorporate as a voluntary benefit. Businesses of all types can offer the benefit to employees without much complication. With anytime enrollment, businesses and their employees are not limited by specified enrollment periods. Depending on the plan selected, an employer can offer pet insurance at zero cost to itself, with participating employees covering the cost in full. Employers, however, have flexibility in choosing a plan and can vary this structure as well as the scope of coverage offered. Various pet insurers also offer plans exclusively for employers, which provide discounted rates to employees, allowing employers to offer the benefit without significant impact on their bottom line.

Employers should consider the size of their business and, depending on demand, choose a plan with no minimum participation requirements offered by multiple insurers. Upon selecting a plan, employers should implement a roll-out strategy to both get the word out and promote enrollment, and also to celebrate the employer’s decision to support every member of its employees’ families. Pet insurance represents a win-win for employers and their employees.

Pet insurance offers a unique way for employers to alleviate concerns faced by many of its employees and ensure employees are able to access quality care for their furry—and even feathered—friends, as certain insurers offer plans for birds and other exotic pets as well. To stay ahead, employers need to address the concerns facing the employees they wish to recruit. Pet insurance can provide a cost-effective path for employers to do just that.

To attract employees, help ease the burden of veterinary costs and stand out among the crowd, employers should consider offering pet insurance as a benefit.