The Loop

Popular Post-COVID Benefit: Pet Insurance

Filed under: Benefits

The pandemic year was filled with changes in lifestyles, consumer buying habits, and enhanced methods for coping with feelings of isolation, fear, and stress. One of the positives that emerged was the number of households that decided to adopt a pet during this time. When animal shelters pleaded for foster families as centers had to shut down, many found enough permanent families to empty them.

The immediate need coincided with people shifting to home offices and desiring the company of a pet. Those who had previously eschewed adopting one because they weren’t home enough suddenly had the opportunity to embrace a furry friend. Now, millions more households have a pet which – as we all know – is like welcoming a new family member.

Today, as many 70 percent of American households – approximately 85 million families – own at least one pet. A common observation among pet owners is that while feeding and grooming costs may be minimal, when a pet becomes ill or injured, that is where the real expense comes in. Like other forms of insurance, a pet policy is typically designed to cover those big expenses.

Pet insurance policies have been around since the early 1980s. However, it’s only been in the past decade that buying a policy has become more mainstream – not a luxury indulged by overly pre-occupied pet owners. For employers that choose to offer pet insurance as part of their benefit package, the message conveyed is that pets are considered vital and important members of the family.

What Pet Insurance Covers

Traditionally, pet insurance covered big expenses incurred through accidents, injuries, and illnesses. However, many of today’s policies offer coverage for spaying/neutering, vaccinations, wellness exams, and chronic conditions, as well as acute illnesses and injuries. After all, modern medicine has been as advantageous for pets as it has been for humans; we can treat previously untreatable diseases and keep our furry friends alive much longer.

In most cases, pet insurance will not cover a pre-existing condition, which is why it’s better to buy a policy when the pet is young, before health issues arise. However, even that is changing to parallel health insurance for people. MetLife recently introduced a group pet insurance policy that includes coverage for a pre-existing condition when an employee switches over from another pet insurance plan. In addition, the MetLife benefit provides access to veterinary telehealth services, rollover benefits, coverage for multiple pets (a family plan), and even grief counseling after the loss of a pet.

A New Financial Stress

One of the concerns of adding a new furry family member is that it will incur extra costs. Whether paying out-of-pocket or paying for insurance premiums, pet care is another line item to be added to the household budget. While premiums vary depending on the pet, rates for dogs are generally higher than for cats, and premiums for older, higher-risk dogs are usually the highest.

However, because most people consider pets as family, they won’t shirk on healthcare expenses. In fact, 10 percent of pet owners say they had missed a payment on another bill to pay for pet care, and around 45 percent say they spend the same or more on an animal’s healthcare compared to their own.

A recent survey found that:

  • 55% of pet owners spend $75 a month on their pet
  • 76% buy presents a couple times a month for no reason
  • 88% celebrate their pet’s birthday
  • 71% buy clothing for their pet, especially for Halloween

On average, the cost of regular and emergency care, food, toys, and grooming can run between $700 and $2,000 per year. Much like children, adopting a pet requires budgeting for these expenses. For young adults in particular, who may be paying down student loans and have a hard time making ends meet, pet ownership may be out-of-reach.

Benefits of Offering Pet Insurance

However, employers have good reasons to encourage workers to adopt pets. This is especially true for those who plan to have workers continue working remotely at least part-time. Having a pet at home can provide companionship and reduce the isolation one feels by staying at home alone all day. In fact, 50 percent of employees who work with a pet at their side report being more productive.

According to a mental health study by MetLife, during the pandemic, about a third of workers reported that their mental health suffered. Research has shown that a pet can help improve its owner’s mental well-being and enable him to better cope with loneliness, depression, and anxiety. Studies have even found that the health benefits of owning a pet, such as adding structure to one’s day and a new avenue for exercise, has been found to reduce blood pressure and lower the risk of a stroke and heart attack.

Offering pet insurance not only helps relieve some of the financial burden that accompanies pet ownership, but it may also encourage workers to adopt a pet. In turn, a higher pet-owning share of the workforce may enjoy the benefits of joy, companionship, and stronger mental and physical health.

Benefit Parity

With benefits for paid family leave, child and elderly care resources, and student loan repayment assistance becoming a national issue, some workers may feel even more left behind when it comes to benefit parity. Pet insurance, which may offer great appeal to singles and childless couples, is not a bad offset. Employers that plan to bring workers back into the office may want to consider offering doggie daycare benefits to provide another option to balance the scale. This would help alleviate the stress and guilt of leaving their newly adopted pet alone while the employee goes back to work all day.

Logistics of Pet Insurance

Administering pet insurance can be much simpler than other employee benefits. Pet insurance can be added to the benefit line-up at any time during the year, as there is no fee, no fixed open enrollment period, and no paperwork for the employer. Employees can get a quote, enroll online or by phone at any time, and their monthly premium can be deducted via payroll or paid directly by the employee.

Pet insurance is typically offered as a voluntary benefit. It is rare for an employer to contribute to pet insurance premium costs, but certainly it could be a low-cost perk that helps differentiate the employer from competitors. Premiums are based on the type of pet, as well as variables such as age, breed, and the employee’s location. Group options feature a discount, with premiums for cats starting at around $15 a month; $25 a month for dogs.

Employees enjoy the flexibility to visit any licensed veterinarian for treatment; there are no plan networks, and many plans offer access to a 24/7 vet helpline. Workers also can customize their policy by selecting different options for coverage, deductible, and limits.

Even before the pandemic, employers were making benefit adjustments to incorporate better support for employee mental health. Pet insurance is aligned with that goal, especially in the wake of transitioning work environments and financial priorities. Certainly, in a remote-work environment, previous in-office perks like free lunches and onsite gyms are no longer relevant. It’s important to consider benefits that will aid Americans working both onsite and offsite.

According to a recent survey, 59 percent of respondents said they would choose to work for a dog-friendly employer over one that is not. Today, only 15 percent of employers offer pet insurance. Therefore, pet-friendly benefits, such as insurance, doggie daycare, and pet bereavement days provide a unique way for employers to attract and retain talent.

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