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October 2018 Tip of the Month

 

Trick Or Treat? Pet Insurance An Employee Benefit?

WE LIKE TO THINK UNCONVENTIONAL! HOW ABOUT YOU?

Today is Halloween where Zach Abo is bringing his Dachshund to work at Red Light Management in Culver City California dressed as a scuba diver and Dr. Benjamin Abo touts that his dog at University of Florida Hospital-Shands is the cutest dressed in a first-responder’s outfit while Marty Abo is on wiener watch for Jane’s three dachshunds. Tomorrow Marty is visiting with a new veterinarian client in North Jersey so what a great time to discuss pet insurance.

Veterinary bills for a dog or a cat can easily run into the thousands of dollars. Thus, pet owners should be pleased that an increasing number of employers are now including “veterinary pet insurance” among the eligible voluntary benefits of their cafeteria plan.

We learned reimbursement ranges from 70% to 100% of covered expenses after a deductible is satisfied, and premiums for full coverage ranging upward of $600 per year. 

Yes, we’ve seen it all over the years, including taxpayers trying to deduct such vet bills as legitimate medical expenses. Look what we learned when we looked into the concept’s application for a client desiring such a fringe benefit for their employees:

  • Two-thirds of employees have pets while 55% of pet owners spend $75 a month on their pet; 76% buy presents a couple of times a month for no reason; 88% celebrate their pe’s birthday; and 71% buy clothing for their pet, especially for Halloween. That be today!

  • 65% of pet owning employees have actually requested pet insurance making it one of the most in-demand voluntary benefit (go figure)

  • Pet insurance is a widely used voluntary benefit which can be a no cost-benefit offered by the employer (great to know in this difficult environment of looking to attract, secure and retain talent. Yep, in this race to recruit Millennial talent lately, every little bit counts)

  • We learned of a study that revealed 90% of employees in pet friendly workplaces feel highly connected to their company's mission; fully engaged with their work; and willing to recommend their employer to others. In contrast, less than 65% of employees in non-pet friendly workplaces made the same claims. 

  • Employers attempting to control the cost of benefits have a range of choices, from paying all of the pet insurance premiums down to simply passing along a discount on the insurance, which can then be deducted from payroll or paid directly by the employee.

  • Similar to identity theft protection from a previous alert, if the employer pays, it becomes a tax-deductible event to the employer perhaps reducing the net, after-tax costs by as much as 54% (i.e. federal income taxes, state income taxes, payroll taxes) when providing this to employees.

As a pet owner you should also be aware that some insurance companies refuse to provide homeowner’s insurance or pet insurance companies may require a higher monthly premium for certain breeds of dogs. You may have trouble qualifying with any dog that falls into the aggressive breed category. For example, Pit Bulls and Pit Bull-like breeds, Rottweiler, Llasa Apsos, Doberman Pinchers and Chow Chows may either come with a higher premium or not qualify at all. Before purchasing a homeowner’s insurance policy, make sure that the insured has no exclusion if you keep one of these dogs as a pet.