According to Mercer’s 2016 National Survey of Employer-Sponsored Health Plans, 15% of all employers with 500+ employees now offer pet insurance as a voluntary benefit to their employees. With pet insurance rapidly growing in popularity, employers must decide which type of policy to offer their employees, as there are wide disparities in coverage levels and costs with these plans.
Key factors to consider when selecting a pet insurance plan include:
- What types of pets are covered? Some plans only cover cats and dogs, while others may also cover birds and/or exotic pets.
- Is preventive care covered? Preventive care for pets represents approximately 40% of all services rendered by veterinarians, but not all pet insurance policies cover it. Plans that offer preventive coverage tend to cost more in monthly premiums, but the additional services covered may justify the added expense. Pets need preventive care to catch conditions early, just like people do.
- How are rates determined? Premium rates for pet insurance typically vary based on type of pet, breed and age, as well as geographic area. Rates are typically set on either the attained or the issued age of the pet. An attained age policy will have lower rates early in the pet’s life, but will increase as the pet ages. With an issue age policy, rates are based on the age of the pet when first applying for coverage and the premium remains constant, even as the pet ages.
Key takeaway: When shopping for pet policies, be sure to look at the cost of the premiums for a 5-10 year period, not just on the first year premium cost alone.
- How are veterinary claim reimbursements determined? Policies are usually set up with either a fixed dollar benefit reimbursement schedule or as a percentage reimbursement of the bill. With a benefit reimbursement plan, the plan pays a set dollar amount per service, regardless of the cost of that service (similar to a dental HMO plan). A reimbursement plan will pay a set percentage (typically 80% or 90%) of the vet bill, up to an annual or policy lifetime maximum (similar to a PPO plan).
- Are pre-existing conditions covered? Pet insurance does not normally cover pre-existing conditions. Keep this in mind if you are looking into coverage for older pets, as they are more likely to have conditions that will not be covered by the insurance.
When choosing the plan that best fits the needs of employees, many factors can come into play. A benefit consultant familiar with the employee base and the plans available in the marketplace can help an employer make the best choice for their employees and their furry friends.