While Spot may be a source of comfort and support for an employee, he also represents something else: a ticking financial time bomb. 

On average, an emergency trip to the vet with a dog can cost anywhere from $800 to $1,500, according to pet care service site Rover.com. For most Americans — who couldn’t afford an emergency expense of more than $1,000, per a January survey from Bankrate — a vet bill of that magnitude would provide significant financial stress, not unlike a car breakdown or a basement flood. 

"Financial stress can be a distraction in the workplace," said Katie Blakeley, vice president and head of pet insurance, group benefits at Metlife, pointing out that Americans spent more than $30 billion on veterinary care in 2020. Pet insurance "really addresses the mental challenge of financial wellness — making sure you have a plan when an unexpected veterinary bill pops up."

Over the past several years, and especially over the past year, employers have increasingly become interested in benefits that can measurably improve their workers' lives. Employee assistance programs frequently offer personalized and intimate forms of help, including connecting employees with alcohol and other substance abuse support and counseling, stress and grief counseling, financial planning support and mental health assistance. 

Employers also help cover employees' families through health insurance benefits and premium cost-sharing that extends to spouses, partners and children. "In the United States, pets are family," Blakeley told HR Dive. Further, data suggests that more than half of American households — in fact, close to 70% — have a pet. Which raises the question: With such a focus on holistic support for employees, why are pets left out?

Regulated as "property insurance"

Fido may be family to the average American, but operationally, he functions much more like property. Pet insurance "falls under the same classification as auto insurance or homeowner’s insurance," Blakeley said. Just as one can’t go out and get car coverage after already being in a car accident, a pet owner rarely finds pet insurance that will cover pre-existing conditions. (Metlife has a special exception for employees who switch to Metlife through their employer from a different pet insurance plan.) 

Typically, a pet owner can get one of a few different plans. Most insurers offer accident-only insurance as well as wellness coverage, which covers routine procedures like spaying and neutering and vaccinations. Monthly premiums vary depending on the pet, with dogs generally costing more than cats and older, higher-risk dogs costing the most. 

For employers, offering pet insurance is "a very easy lift," Lydia Jilek, senior director of voluntary benefits solutions at Willis Towers Watson, told HR Dive. Employers simply add the product through their intranet sites, where employees access their other benefits. 

"We recommend that our clients set up the program as a direct-bill product, rather than having it go through payroll," Jilek said. This strategy separates the expense and keeps it front-of-mind for employees, so in the case of a pet loss, they can more easily remember to cancel the insurance. It also generally allows employees to sign up at any point throughout the year, which makes more sense for employees who adopt a new pet.

Employers almost never share in the premium costs, sources said, but in offering the product, they often provide their employees access to a discount. Metlife, for example, provides workers who opt into an employer-offered plan a 10% discount from the price they would qualify for if they approached the company on their own, according to Blakeley. Workers also benefit from the "due diligence" of the employer comparing different plans and selecting the one they regard as most beneficial, she said.  

Still, the number of employees who participate in employer-offered pet insurance programs tends to be low — in the single digits, according to Jilek. Primarily, this is because "it tends to be a bit more costly than most people anticipate it is going to be," she said. According to Value Penguin, insuring a dog’s health can come with a monthly fee averaging more than $40, which is well beyond the price of employer-sponsored vision and dental insurance for many employees. With few currently opting into the system, there are reasons to consider more creative and supportive ways of offering the benefit.

Changing employee expectations

News stories about "emotional support" animals have given rise to jokes galore, but the research on pets and mental health is serious. The United Kingdom-based Mental Health Foundation notes that pets can reduce anxiety, boost self-confidence, provide companionship and add structure to one's day — all supportive factors for mental health.

Employers have shown increasing interest in benefits that support their employees' mental health, including education, awareness campaigns, expert-led sessions, virtual wellness platforms and more. Why not consider pets an extension of employees’ mental health?    

The surge in pet adoptions during the pandemic is one indicator that individuals, at least, may consider their pets to be supportive to their mental health. And with more "pet parents" bracing to go back to work — especially new pet parents, with pets unused to their owners being gone throughout the day — circumstances may have shifted for many employees. 

Further, generational shifts in the workplace suggest employees' attachment to their pets will likely only grow more intense. Millennials have recently surpassed baby boomers as the largest adult generation and also as pet owners, with 3 in 4 millennials owning a pet. While Generation Z is just emerging into adulthood, early research in the pet industry space suggests their love of pets is no less strong, with 84% calling the statement that pets are "lasting best friends" extremely or very relevant and 80% agreeing that "pets will always be there for you when you’re lonely." 

While no generation can claim to love pets more than any other, millennials and Gen Zers — many of whom are still in the early years of their careers — are now seeing employers stretch to accommodate the complications of the pandemic, to offer a wider portfolio of benefits, and to attract more talent in unconventional ways. With a worker's market on the horizon, easily accessible pet insurance could be a unique draw for potential employees.

Future of pet insurance

Employer offerings of pet insurance are expected to spike over the next year, with 69% of employers saying they expect to offer it as a post-pandemic employee benefit (a 22% increase from the 47% who currently offer it). Pet insurance providers have seen this interest reflected in the inquiries they’ve fielded.

"We are increasingly getting requests from employers" even without contact from the company in advance, said Alex Douzet, CEO of Pumpkin Pet Insurance. He said Pumpkin, which is under two years old, is currently looking at the best way to accommodate employers' requests. 

Blakeley has also noticed an uptick in interest: "I think more and more employers are taking a harder look at how they’re supporting our workforce in very practical ways. They’re also taking a harder look at benefits that five years ago were perceived as ancillary ... Now in the present day, pet insurance is becoming much more commonplace." 

Douzet can see a future where employers subsidize pet insurance the same way they subsidize human healthcare plans. Companies just need to make the "mental switch" to recognize pets as family members worthy of coverage. "I think the HR department will have to come around and say, 'If we want to be competitive, we have to pay for the premium — not all of it, but some of the expense.'" 

Workplace amenities like gyms and cafeterias are becoming less important for employees in a future that is expected to allow more workers more time at home. Knowing that they may have that time "makes it easier for employees to say, 'I've always wanted to have a pet. And now that I don’t have to be in the office five days a week, I can have a pet,'" Douzet told HR Dive. In other words, subsidized pet insurance may make more sense as an offering than other benefits employees currently don’t use and, in the future, won’t be likely to use.

"The insurance industry evolves and as the benefits expectations from employers and employees evolve, I do think that you'll start to see more employees that would love to see their employers [offer] even just a nominal contribution ... 'We’ll contribute $10 per month or $10 per pay cycle for a pet insurance policy of your choosing'," said Blakeley. "It's just another way to demonstrate to employees: 'We see what's important to you and we want to help support your whole self.'"