|William Reardon, 6, horsed around with bullmastiff Mick, who has health insurance, in Andover. (Mark Wilson for The Boston Globe)|
Pet health care a perk
The voluntary benefit is a low-cost way for companies to keep their workforces happy
The Liberty Hotel is a pet-friendly place. Staff members bring in their dogs; guests check in with birds, ferrets, even a monkey that stayed for six months during a movie shoot. So when the Boston hotel started offering pet insurance as part of its employee benefits package two years ago, workers saw it as a natural extension of the health care plan.
“People who are dog people or cat people, they love their pets as much as they love their own children,’’ said general manager Rachel Moniz.
Pet insurance offered by companies such as Liberty Hotel is becoming increasingly popular as owners grapple with the rising cost of caring for their animals and employers look for additional, low-cost ways to keep their workforce happy.
For companies, pet insurance is a voluntary benefit, similar to life insurance or financial planning services, that they can offer at a group discount. The cost, however, is paid entirely by employees. Voluntary benefits are becoming more prevalent as consumers seek more options to manage costs and other risks during a down economy, according to the International Foundation of Employee Benefit Plans, and companies look for perks they don’t have to pay for.
Meanwhile, the increasingly sophisticated treatments available to animals, from ACL surgery to pacemakers to chemotherapy, have sent pet bills soaring, making insurance a more palatable investment.
“We’re bonding with our pets the wealthier we get, and once we become more bonded, we see the value more of taking care of their health,’’ said Dennis Drent, chief executive of Veterinary Pet Insurance Co., known as VPI, who once asked his wife how much she would be willing to spend on their longhaired miniature dachshund. “I got to $10,000 and my wife didn’t even flinch.’’
Like health insurance for humans, pet coverage can vary widely, though it typically runs a few hundred dollars a year, depending on plan details and type of animal. It is now a $300 million business in the United States and expanding rapidly, with sales more than doubling from 2005 to 2009, according to the market research firm Packaged Facts.
Still, only 9 percent of companies in the United States and Canada offer pet insurance, according to the employee benefit foundation.
VPI has contracts with nearly 2,000 employers, 172 of them in Massachusetts, including
Sean Reardon racked up $1,500 in vet bills caring for a bullmastiff puppy that ended up dying of unknown causes, so when his family got another puppy about a year ago, he signed up for VPI’s pet insurance through the Liberty Hotel.
Reardon, director of sales and marketing at the hotel, pays about $500 a year for the premium, and after several visits to the vet in Andover for vaccines and treatments for fleas, hives, and rashes, the policy has more than paid for itself, he said.
“It gives me an appreciation that they’re looking out for their employees,’’ he said of Liberty for offering the insurance. “There’s coverage provided for my wife and my children, so again this is just another progression in the care of employees and their families.’’
About 5 percent of Liberty’s 250 employees use the pet coverage.
Pet insurance provides a competitive advantage in the hiring process, said Barbara Trevisan, spokeswoman for Pine Street Inn, which started offering the coverage last summer after several employees asked for it.
“We feel it is one of the things we can do, because we know the work is hard,’’ she said.
Coverage varies depending on the plan, deductible amount, location, and breed and age of the pet. For a 5-year-old Persian cat in, say, Medford, an owner would pay $11 a month for VPI injury insurance. This doesn’t mean VPI covers 100 percent of the bill; on a $1,900 bill for a broken leg, the owner is responsible for $600, with a $250 annual deductible. Routine care, including heartworm treatments and vaccinations, can be added for $12 a month.
The pet insurance market has huge growth potential. The market research firm Packaged Facts estimates that sales will increase by double-digit percentages over the next few years, reaching $881 million by 2014.
Of the 170 million pets in this country, fewer than 1 percent are insured, according to Packaged Facts, compared to an estimated 4 percent in Canada and 25 percent in the United Kingdom; as awareness continues to grow, the dozen companies that offer pet insurance in the United States are poised to scoop up new business.
“It’s just a matter of time,’’ said Steve Popovich, president of the Raleigh, N.C.-based insurer PetPartners Inc.
Two years ago, few if any of the animals treated at South Boston Animal Hospital were insured, said veterinary technician Sean Fulton. Today, about a third of them are.
“I’d say it’s definitely a good thing to have, especially with new puppies who come in for vaccines all the time,’’ Fulton said. “Puppies are always getting into stuff.’’
Still, some say it’s not worth the cost. Consumer Reports analyzed nine pet insurance plans and found that for a healthy pet, none of the polices would have paid out more than the projected premiums over a 10-year period. For pets in need of major care, on the other hand, insurance made sense.
Bay State College considered offering pet insurance but did not get enough interest from employees to make it worthwhile. Human resources manager Donna Gaffey has pet insurance for her 4-year-old Labrador retriever, Marley, but started questioning it as the rates inched up, from $32 a month to $37.
“Every year it goes up, and I’m thinking, am I stupid for having this?’’ she said.
But when Marley’s lung collapsed and he rang up $3,000 worth of X-rays, tests, and exams, Veterinary Pet Insurance covered 70 percent of the cost.
“I was very happy I stuck with it,’’ Gaffey said.
Katie Johnston can be reached at firstname.lastname@example.org.