The use of voluntary benefits to assist, attract and retain employees is rising in popularity — especially one that will help beloved family members: pets.
“Pet insurance is a small, but growing, voluntary benefit, with one in three Fortune 500 companies now offering pet insurance,” writes Nick Otto for Employee Benefit Adviser. “According to research from the Society for Human Resource Management, 9 percent of organizations say they are offering pet health insurance in 2016, a 5 percent jump since 2011.” It’s likely an untapped market, writes Mindy Norton for Alabama Public Radio.
“Penetration rates in the U.S. remain around 1 percent. That’s far lower than Western Europe, where some countries have up to 40 percent of pet owners with coverage,” she writes. “Analysts see the U.S. market as a big growth opportunity, particularly as more employers are offering pet insurance as a voluntary benefit.”
A recent Harris poll found 65 percent of U.S. households own at least one pet, and they spent more than $15 billion veterinary care in 2015, Otto writes. Costs are going up as vets use more advanced treatments for animals.
“Advances in veterinary science can result in a better chance for your pet to recover from an illness or injury, but it may require expensive tests, procedures and medicines,” Norton writes. “There are veterinarians who specialize in such things as cardiology, orthopedics, and ophthalmology.”
So how does the insurance work?
“There are essentially three types of coverage: accident only; accident and illness combined (the most common plan); or wellness coverage (this could include everything from annual checkups to dental treatments),” writes Jeff Daniels for CNBC. “Some of the accident and illness coverage may contain wellness features or options.”
Plans average about $38 a month, he writes, citing research from the North American Pet Health Insurance Association. “All in, American pet owners paid premiums totaling about $690 million in 2015, a 17 percent increase over 2014.”
And while pet insurance makes good economic sense for some owners, employers are using it as a recruiting and retention tool, Otto writes. He calls it a “warm, fuzzy benefit” meant to increase employee happiness.
It could be especially appealing to Millennial employees, writes Erin Moriarty-Siler for Benefits Pro.
“Studies have shown other Millennials are … forgoing childbearing and opting for pets instead,” she writes. “(Some are) confident that it will quickly become a top voluntary benefit for all employees, not just Millennials.”