The Furry Fundamentals of Pet Insurance

Editor’s Note: This piece first appeared in the February 2023 edition of The Voluntary Benefits Voice.

At a time when inflationary pressure and financial stress are hitting employers and employees alike, employers nationwide are carefully identifying how to simultaneously cut down on spend and provide comprehensive benefits to attract and retain talent.

HR leaders know all too well how lost time and productivity from employee turnover can affect your bottom line, too. In fact, according to the Society for Human Resource Management, it costs the average employer$4,129 to hire one employee, and it will take that employee about 42 days to get acclimated and work at capacity. Additionally, the average company loses between 1% and 2.5% of its total revenue during the time it takes for an employee to be brought up to speed.

Voluntary benefits, however, have the ability to offer a happy medium between boosting retention and possibly reducing employer spend, especially if they are precisely tailored to your specific workforce population.

One trendy yet fairly underutilized voluntary benefit that could prove especially enticing in 2023 is pet insurance.

Let’s consider the facts.

According to a recent report from MetLife, of the over 90 million families with pets in the U.S. today, only 3% of those pets are insured. The same report found that 84% of pet parents reported increased petcare costs in 2022, and 65% of employees with pets are interested in their employer offering pet insurance.

Pet insurance is also becoming increasingly popular, growing at a rate of 22.1% over the past five years according to the North American Pet Health Insurance Association. Furthermore, an unexpected visit to the veterinarian can cost anywhere from $800 to $1,500 on average. This could be a significant financial setback for many pet owners.

Data from Mployer Advisor’s 2023 Insights Report found that 16% of employers nationwide said they offer pet insurance to employees and that it is a benefit more commonly offered among large employers. From a benefits prioritizationperspective, it’s unsurprising that pet insurance did not rank as highly as other more traditional benefits—think vision, dental, retirement—but 10% of employers still said it was an important benefit.  

What’s more, a whopping 30% number of employees said that pet-related benefits would influence them to stay with their employer, according to a 2022 survey from Nationwide. The survey also found that voluntary benefits, including pet insurance, could be a differentiator for employees who own pets (especially among Gen Z and Millennials).

Now, imagine that a community hospital adds pet insurance to its benefits package.

At no additional cost, the hospital boosts morale and productivity by demonstrating a vested interest in their employees’ lives outside of the workplace. The employees feel grateful to have this additional financial and emotional security, and they feel comforted knowing their pets will be well taken care of in an emergency.

Above anything else, employees will want to feel valued and trusted. When they see that their employer will go the extra mile in providing voluntary insurance options, they are more likely to stay with their company. And retaining employees is good for both employee morale and your out-of-pocket costs.  

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