For many employees, pets are cherished family members, enriching their lives immeasurably. However, the financial commitment to their health is substantial. Recent data from Forbes Advisor indicates the average annual cost of owning a dog can reach $1,533, and this figure can rise significantly with the occurrence of unexpected medical expenses. For cats, these figures reach close to $700. This can create significant financial strain for pet-owing members of the workforce.  

Incorporating pet insurance into employee benefits packages offers a viable solution, helping to relieve financial strain and reduce worry. Yet not all pet insurance and pet-related benefits are created equal. Different plans are designed to meet diverse needs and budgets, and it can be difficult to navigate options that are changing as quickly a dog barks “squirrel.” 

So how do you know what will be most beneficial to your clients and their employees? In this article, we’ll talk about the different types of pet insurance and help you make an informed decision. 

Traditional Pet Insurance: Coverage for the Unexpected 

Traditional pet insurance primarily helps pet owners manage the costs associated with unforeseen accidents and illnesses that can affect their animal companions. They are still considered an essential part of any pet benefit package.  

Basic Structure 

Most pet insurance plans operate on a reimbursement model. The pet owner typically pays the veterinarian upfront for services and then submits a claim to the insurer for repayment. Most policies include a deductible, which is the amount an owner must pay out-of-pocket before coverage activates. After the deductible is satisfied, the plan reimburses a percentage of covered costs, commonly 70% to 90%. Annual coverage limits apply, which cap the total amount an insurer will pay in a policy year. Some plans offer unlimited options.  

There are two main categories of traditional plans: 

• Accident and Illness Plans: This is the most common type. They cover a broad range of issues, from infections and digestive problems to broken bones and cancer treatments. They provide extensive financial protection against many health problems a pet might experience during their lifetime. 
• Accident-Only Plans: These plans offer a more limited scope of coverage. They reimburse for treatments related to accidental injuries, such as poisoning or injuries from a car accident, but do not cover illnesses. Accident-only plans typically have lower premiums. They can be a practical option for older pets who may not qualify for comprehensive coverage or for owners who seek a more budget-friendly emergency safety net. 

Pros and Cons of Pet Insurance 

The primary advantage of pet insurance is the financial peace of mind it offers, especially when faced with large, unexpected veterinary bills. Customizable plans allow tailored coverage limits, deductibles, and reimbursement percentages to fit different needs and budgets. Moreover, many insurers now streamline the claims process with electronic (online) submissions, which makes reimbursement quicker and easier. 

However, premiums can be a considerable expense, particularly for older pets or those with pre-existing health conditions that most plans won’t even cover. Also, the reimbursement model, while standard, means pet owners must have funds available to cover the initial vet bill before they get paid back. 

Pre-existing Conditions & Waiting Periods 

Most pet insurance carriers will not cover pre-existing conditions. A pre-existing condition is defined as a health issue that a pet showed signs of, or received treatment for, before the policy start date (including during waiting periods). Waiting periods are common, often a few days for accidents and a couple of weeks for illnesses; some orthopedic conditions might have longer waiting periods. Any condition that arises during these waiting periods typically becomes a pre-existing condition. Some insurers might cover “curable” pre-existing conditions if the pet remains symptom-free for a specified period, like 180 days, though exclusions, particularly for knee issues, can apply. 

Value for Employees 

For employees, traditional pet insurance provides a crucial safety net. It helps them afford necessary, sometimes lifesaving treatments for accidents and illnesses without facing devastating out-of-pocket costs. It allows them to make care decisions based on their pet’s needs rather than solely on cost. 

Pet Wellness Plans: Supporting Proactive Healthcare 

Pet wellness plans focus on preventative care, which helps maintain a pet’s health and can prevent more serious issues down the line. Unlike insurance that addresses unexpected problems, pet wellness plans help pay for routine veterinary services. They’re an excellent option for employees who prioritize regular health maintenance for their companions. 

Basic Structure 

Pet wellness plans usually operate on a subscription or membership model, where pet owners pay a regular fee (monthly or annually) for a set of specified routine care services. Sometimes called preventative care plans, they cover services like annual check-ups, vaccinations, flea, tick, and heartworm prevention, routine blood work, and dental cleanings. You can find wellness plans structured in two primary ways: 

• Standalone Wellness Plans: These are independent plans that employees can purchase without an accompanying insurance policy. They offer a fixed package of services or a reimbursement allowance for specific routine care categories. Pet Benefit Solutions’ Wishbone wellness plans, for example, offer two levels of standalone reimbursement options that do not require enrollment in an accident and illness policy. 
• Wellness Riders: These are add-ons to a traditional pet insurance (accident and illness) policy. For an additional premium, pet owners can include coverage for routine care services. 

Pros and Cons 

A major benefit of pet wellness plans is that they encourage proactive veterinary care, which can lead to early detection of potential health problems and better long-term health for pets. They make budgeting for routine care more predictable, as expenses are spread out through regular payments. Some plans might also include discounts on other services or products from the veterinarian. 

On the con side, these plans do not cover treatments for accidents or illnesses. Their scope is strictly preventative care and should not be confused with comprehensive pet insurance. If an employee’s pet remains exceptionally healthy and does not utilize many of the included services, the plan might not be as cost-effective for that individual. Furthermore, some pet wellness plans come as fixed packages, potentially including services a pet owner may not need. 

Pre-existing Conditions 

Pre-existing conditions are generally not a barrier or concern for pet wellness plans because these plans cover routine and preventative services rather than treating existing illnesses or injuries. The emphasis is on maintaining long-term pet health and preventing future problems, irrespective of past medical history. 

Value for Employees 

For employees, pet wellness plans make essential preventative care more accessible and affordable. Regular check-ups, vaccinations, and screenings contribute significantly to a pet’s overall well-being and can reduce the likelihood of more costly health issues later in life. This supports responsible pet ownership and helps employees manage predictable healthcare expenses for their furry family members.

Pet Discount Plans: An Alternative for Greater Savings 

Pet discount plans offer another option for employees to save on veterinary costs. These plans are not insurance. Instead, they provide members with access to reduced prices on veterinary services and other pet-related products from a network of participating providers. This option can be an attractive part of an employee benefits package, especially for those seeking immediate savings without complex claim processes. 

Basic Structure 

Employees who enroll in a pet discount plan typically pay a monthly or annual membership fee. In return, they receive a discount, such as 25%, on qualifying services at veterinarians who are part of the plan’s network. Members present a membership card at the time of service to receive their discount instantly, eliminating the need for claims, deductibles, or complicated paperwork as they wait for reimbursement. 

Pros and Cons 

One of the primary advantages of pet discount plans is their typically lower cost compared to traditional pet insurance premiums. There are typically no exclusions for pre-existing conditions, and enrollment is often open to all types of pets regardless of age or breed (including exotic pets). There are usually no waiting periods, deductibles, or annual limits. This makes them particularly useful for pets that might be uninsurable or very expensive to insure under traditional policies.  

The main con is that discounts are only available at veterinarians who participate in the network, which might limit choice, especially in areas with fewer participating clinics.  Additionally, discounts might only apply to “in-house” medical services performed at the clinic, potentially excluding costs for lab work sent out, specialist referrals, or prescription medications filled elsewhere. While discounts are helpful, they may not provide the same level of financial protection as pet insurance for very large, catastrophic expenses, as the owner still pays the majority of the bill. 

Pre-existing Conditions 

Pet discount plans are a great option for pets with pre-existing conditions because the discount is applied to the veterinarian’s bill regardless of the pet’s medical history. Since it is not an insurance product indemnifying against risk, the pet’s prior health status does not affect eligibility for the discount on covered services. 

Value for Employees 

For employees, pet discount plans offer a straightforward way to achieve immediate savings on veterinary care and other pet-related expenses. They are especially valuable for pets with pre-existing conditions, older pets, exotics, or pet families with or multiple pets where insurance premiums could be prohibitive. They provide a low-cost pet insurance alternative that makes overall pet care more affordable without the complexities of insurance claims or waiting periods. 

Maximizing Value: Why You Need All Three 

Offering a suite of pet benefits that includes traditional pet insurance, pet wellness plans, and pet discount plans provides employers with truly comprehensive solutions. By offering all three types of pet care plans, you empower them to cater to a diverse workforce. Employees have varying needs based on their pet’s age, breed, health status, and their personal financial comfort levels. Offering choice shows that an employer recognizes and respects these varied circumstances. 

Furthermore, a comprehensive pet benefits package is a powerful tool for talent acquisition and retention. In today’s competitive job market, perks like these can make an employer stand out. Employees increasingly expect benefits that support their lifestyle, and for many, pets are a central part of that.  

Partner with Pet Benefit Solutions for Comprehensive Care 

Incorporating traditional pet insurance, pet wellness plans, and pet discount plans into your portfolio allows you to meet evolving client needs effectively. 

Pet Benefit Solutions simplifies the process by offering all three types of plans, along with dedicated support, turnkey solutions with over a dozen HRIS & ben admin platforms, and a self-service admin portal that makes managing plans a breeze. As the only voluntary benefits provider specializing in both pet insurance and pet insurance alternatives, we lead the pack through unrivaled choice, innovative plans, and exceptional customer care. Visit our site to request a proposal today!