Is pet insurance in Fluffy’s future?

Michelle Hicks

They may not qualify under an ERISA plan as an actual dependent, but millions of Americans view their four-legged friends as more than just furry companions – they’re actual family members. And, Americans are spending a fortune to keep them healthy. According to the American Pet Products Association, U.S. pet owners spent $12.8 billion in veterinary care in 2010. Because owning a pet isn’t cheap, more employers are starting to turn to pet insurance as a voluntary benefit offering that can help employees deal with this rising cost.

The reasons for increasing pet costs are similar to the reasons for rising human health care costs, such as new health care technologies and medicines. A pet MRI can cost around $1,500. The average routine exam is $225 for dogs and $203 for cats. These are all expenses that come directly from your employee’s pocketbook when they don’t have pet insurance.

Like human health insurance, there are a number of policies to choose from. Employers interested in exploring this as a benefit offering need to consider the policy options similar to how they would select a human plan.

For example, what is the philosophy behind selecting a plan? Do you want to help avoid “economic euthanasia” when a catastrophic illness or accident arises? Then, perhaps you want to consider offering higher-deductible plans with low monthly premiums. Do you want to help employees curb the out-of-pockets costs of annual visits? Then you may want to select a plan offering that has a little higher premium, but lower co-pays.

Avoid selecting policies that require participants to use “in-network” vets. And, consider if other wellness options are covered such as dental services and prescription drugs. Also, you can ensure your plan is inclusive of all pet tastes, by considering if exotic and avian pets are covered under the policy, too.

According to pet insurance provider VPI, pet insurance is a no-cost addition to benefit packages. Employees pay 100 percent of the group rate for insurance – many out of post-tax payroll deductions.

So, if you’re looking for a way to enhance your benefit offerings without adding expense, voluntary pet insurance could be a product to consider. Remember, the Pet Product Manufacturers Association says 62 percent of all Americans have pets, compared to 46 percent of Americans who have children of the human variety. Offering employees a way to cover Fido’s expenses could be a great morale booster when it’s tough to find the resources for pay increases or bonuses.

Michelle Hicks is a communications consultant with Buck Consultants. Contact her at michelle.hicks@buckconsultants.com.

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