In the dog-eat-dog world of attracting top employee talent, petinsurance can help to differentiate a company's benefits package.When it comes to talking to a CEO about pet insurance, make surethe cat hasn't got your tongue. Pet insurance is purr-fect foremployees. 

Human resources and employee relations directors across theUnited States have probably heard them all by now. But petinsurance continues to be one of the fastest growing employeebenefits in the country. Brokers and agents would be wise to avoidthe puns and think seriously about talking pet insurance withemployers of all stripes. 

Just ask Kevin Waters. 

Director of employee relations and benefits at Fairfax,Va.-based Ellucian, which specializes in software and services forhigher education institutions, Waters has helped shepherd petinsurance at two companies, so he's well versed in the benefit'sbenefits. He's also a pet owner, so he can talk about the benefitfrom an employee perspective, as well. 

“My boss had come to me and said she wanted us to think outsidethe box about offerings we could provide,” Waters recalls. “Some ofour employees actually came up to us and asked why we weren'toffering pet insurance. They were saying that pets were like theirchildren and they'd like to have coverage. It made sense to mebecause I had two cats and no kids. So I started doing research onpet insurance.” 

Waters ended up going with one of the nation's largest petinsurance companies, ASPCA Pet Insurance. ASCPA—the AmericanSociety for the Prevention of Cruelty to Animals—is one of thelargest groups in the country devoted to animal well-being. Thenonprofit contracts with the Hartville Group in Canton, Ohio, tooffer pet insurance to employers and individuals.  

The industry can report double-digit growth during the past fewyears, with similar growth expected for some time. There are anumber of reasons why. For starters, the benefit is easy to use andemployees will notice similarities between their pet plan and theirhealth insurance. Pet insurance doesn't cost employers anything andgives them an advantage in employee recruiting and retention.Workers say the benefit allows them to cover a loved one withease.

 “It's growing rapidly,” says Chris Ashton, co-CEO ofPetplan Pet Insurance in Philadelphia. “Last year, we grew about 45percent, so the industry as a whole and companies like us aregrowing. People are hearing about it.” 

Ashton and his wife, Natasha, started Petplan after they movedto the United States to attend the Wharton School of Business atthe University of Pennsylvania. At the time, their cat got sick,which resulted in a hefty vet bill the couple had to pay out ofpocket. 

After the experience, the two began looking to cover their petsand found that pet insurance is far more common in the BritishIsles than in the colonies. It didn't take them long to see thebusiness opportunity. Petplan is now an industryleader. 

Understanding the breed

Pet insurance has been around since the early 1980s in theStates. In Europe, it's been around a lot longer. Basically, when apet gets sick, the provider covers expenses incurred by the pet'sowner based to the plan they've chosen. While pet insurance is aform of property and casualty insurance, the product to employeeswill resemble their health insurance—there are co-pays, deductiblesand claims just like a health plan. 

In many cases, employees pay for any veterinary care, then getreimbursed by the provider. Some pet insurance companies providepet wellness plans or cover routine expenses such as trips to thevet's office, species-specific conditions or vaccinations. Premiumsmay be paid through monthly payroll deductions or directbilling. 

Pet insurance companies also engage in active employeecommunications programs, sending out periodical publications aswell as maintaining websites with all kinds of information for petowners. The industry has an association—the North American PetInsurance Association, based in Chagrin Falls, Ohio. 

Pet insurance is for dogs and cats, not high-dollar investmentanimals such as horses and livestock. One company, however, coversbirds and exotic pets.

“We're the only plan that covers avian or exotics,” says DeanaSingle, director of group accounts for Veterinary Pet Insurance inBrea, Calif. “If you have an African Gray parrot or a hedgehog or apot-bellied pig, we have a plan to cover that.” 

For employers

For employers, the most significant selling point of petinsurance is its cost. It's a voluntary benefit, so it's basicallyfree to the employer. In fact, the only real cost associated withoffering pet insurance is the negligible cost of allowing employeesto pay for the plan through a payroll deduction. 

“As employers ourselves, we know firsthand the value in helpingemployees afford the best health care for all their family—bothtwo-and four-legged—should they fall ill or have an accident,”Ashton says. “We wanted to give companies a way to decrease churnby making their benefits program more robust—all without addingfinancial or administrative costs. Since employees can work with usdirectly, our program truly can add significant value withoutadding an additional administrative burden to HRadministrators.” 

In terms of employee satisfaction, many industry insiders saythat offering the benefit communicates to employees that theiremployer is making an attempt to provide them with benefits thatare of value and are germane to their lives. 

“I can tell you, from being on site, I see it as a moralebooster,” says JoAnne Novak, vice president of business developmentat the Hartville Group. “They love the fact that it's being madeavailable. People who don't have pets even tell us they like itbecause it shows their employer is really doing something for theiremployees.”

Waters says he's had to “position” pet insurance with his CEOs,making sure to point out the benefit's positive aspects, includingits affordability and impact on employee effectiveness. He alsouses it in his employee recruitment strategy. 

“It shows we offer the traditional benefits, but we offer alittle bit more for our employees.” Waters says. “It's a sellingpoint, so when we do our orientation, we make sure to talk aboutour pet insurance.”

For employees

Pet insurance helps employees in a number of ways, too. Plansfeature a network of veterinarians, so employees can take theirbarking or purring family member to a veterinarian if something badhappens on a vacation or work trip.

“Our plans actually come with a travel assistance program, so ifyou're traveling with a pet, a call to our travel assistancepartner will help you connect with veterinary referrals,” Novaksays.

Additionally, Waters says, employees at Ellucian value payingtheir monthly deductible with a payroll deduction—it's one lessbill to worry about. 

“We get medical insurance for ourselves,” Waters says. “I lookat the pet as my family and my children, so I want to make surethey have the best coverage and care as possible. I believe thathealth insurance is one of the things that I can do forthem.” 

For brokers, the popularity of pet insurance may even help reelin some in some new customers. 

“From a broker standpoint, here's a way to differentiateyourself with a broader portfolio at no cost to the employer,”Single says. “From an employer standpoint, we tell them 52 percentof employees have at least one or more pets and they treat theirpets like children. Pet insurance makes you the hero, and thethings they care about are covered. To employees, we say that thethings you care about are covered, why not your pet?