Pet health benefits vs. pet insurance: what HR teams need to know

Building a total rewards solution for your team can be an exciting but daunting exercise for HR leaders. Balancing the needs of a diverse workforce with benefits that add value and attract and retain talent is key to success.

It’s crucial that HR teams understand exactly what their people are getting from each benefit they offer and how it will contribute to the department and company goals. And one of the most misunderstood and often neglected total compensation solutions is pet health programs.

In this article, we’ll walk you through what you need to know about pet insurance and pet health benefits. While they might seem like the same thing, if you dig deeper, you’ll see some significant distinctions between the two, as well as the value they offer to employees.

So, what are the differences between pet insurance and pet health benefits? Let’s dive in.

Pet insurance is one of the most common pet-related benefits offered by employers. According to MetLife's 21st Annual U.S. Employee Benefit Trends Study, in 2023, 16% of US employers offer pet insurance to their employees. But these numbers don’t tell the whole story when you consider that pet insurance adoption in the US overall is very low, hovering just under 4%.

Generally, pet insurance is provided as a perk by an employer to employees as a discount on a pet insurance policy.

Although more businesses are offering pet insurance to employees, it’s often underutilized. Most pet owners file claims only once or twice during the policy's lifetime.

Pet insurance is primarily used in emergency circumstances for non-routine and unexpected care when a pet owner has to file a claim for surgery or a medical procedure. Most pet parents purchase pet insurance hoping they never have to use it.

Pet insurance generally does not cover preventative, wellness, or routine annual care and is generally not subsidized by employers. The average fee for pet insurance in the US covering accidents and illness can range from $380 to $675 annually, with a deductible reaching as high as $1,000.

On the other hand, a pet healthcare benefit, like Vetster, is for everyday pet health support, providing access to online veterinary care that helps address common pet health questions, issues, and concerns that arise in the daily lives of pets.

Pet telehealth platforms provide pet owners with 24/7 access to top-rated licensed veterinarians through virtual video appointments and live chat, delivering expert advice, accurate diagnoses, prescriptions and comprehensive pet treatment plans anytime, anywhere, and on any device.

The primary difference between pet insurance and pet health solutions is that while the former is designed not to be used, the latter is meant to be used regularly and as part of a pet’s proactive care.

Pet insurance is structured similarly to human health, home or auto insurance. Employees pay for a policy based on their animal’s breed, age, and pre-existing health conditions. Policies are usually paid monthly, and rates can vary depending on a number of factors.

The policy covers unexpected veterinary costs for their pets in case of accidents or illness. Though pet insurance coverage varies by policy and provider, it often covers diagnostic tests, surgeries, hospitalizations, medications, and, in some cases, certain chronic conditions. Some insurance plans also offer optional add-ons for preventive care, such as vaccinations, flea and tick treatments, dental care, and wellness checkups.

It’s important to know that pet insurance policies may exclude certain pets from coverage based on pre-existing conditions or breed-specific health issues. Owners also need a unique policy for each pet in their household.

Pet healthcare benefits, like Vetster, offer employees fast access to top-rated vets, with virtual appointments available in as little as 15 minutes. They’ll receive quick, reliable support for their pets with unlimited health coaching, triage, and follow-up care.

These benefits are meant to be used frequently and are available 24/7, anywhere and on any device. They also cover all pets, regardless of breed or age.

Dedicated apps keep track of medical records, lab results, pet history and prescriptions. With some apps offering an integrated pharmacy, employees can also quickly and easily order their prescriptions all on one platform.

Resource libraries available on these platforms also provide high-quality, expert-backed pet education materials so pet owners can make informed decisions about their pet's health, understand common conditions and access tips on nutrition, training and overall well-being.

Pet insurance isn’t generally seen as a high-value benefit to employers as part of a total rewards program. In most cases, employers provide a discount on the insurance policy - like a perk - rather than sponsoring the program, which means adoption tends to be low. Pet insurance relies on most pet owners not needing to use it. Many policyholders terminate within the first year because they are paying for something they aren’t using.

While pet insurance is a worthwhile financial product for pet owners to have - and we do recommend it at Vetster - it’s unlikely to have a significant organizational impact in terms of improving retention, reducing annual pet expenditures, or contributing a positive workplace culture. Instead of directly improving employee well-being or job satisfaction, pet insurance mainly acts as a safety net.

The affinity employees have for pet health benefits programs is clear when you compare their eNPS scores to other types of benefits. Vetster’s eNPS (Employee Net Promoter Score) is 97, while clinical vet care scores 71, and pet insurance sits at 29.3. Employees consistently rank pet benefits highly because they offer meaningful value by supporting the well-being of their pets.

Pet telehealth and telemedicine services are a key part of a pet-friendly workplace and a high-engagement benefit employers can provide to their employees. Companies with pet-friendly policies experience increased employee satisfaction, with 91% of employees in pet-friendly offices reporting that they are more fully engaged with their work, compared to 65% of employees in non-pet-friendly offices.

In fact, a pet-friendly workplace is so important to some employees that in a recent Vetster survey, 60% of workers reported they would consider leaving their job if it conflicted with their ability to care for their pet.

While both pet insurance and pet healthcare benefits offer financial advantages, only pet healthcare benefits help foster a pet-friendly culture, focus on pet well-being and help save employees time and money associated with caring for their pets.

As one of Canada’s top-rated employers, Samsung wanted to provide pet healthcare benefits as part of a high-value, in-demand, and comprehensive total rewards package for its 700 employees.

Within its first 12 months, the organization realized a 15x Return on Investment (ROI) from the Vetster for Business program. The program also saved $20,000 on vet bills and 800 hours for employees. Employees across the business also rated it 100% satisfied.

Read the full case study here Samsung: Powering a global electronics giant with pet benefits

Offering pet insurance to employees has its benefits, providing pet owners with peace of mind as a reliable safety net.

Employees should consider investing in pet insurance while their pets are young, as premiums are generally lower. Starting coverage early helps keep insurance more affordable throughout the pet's lifetime compared to enrolling when the pet is older. While employees may not use it often, when they do, it can provide essential financial support for unexpected and sometimes costly pet health expenses.

But if you want benefits that offer genuine daily and long-term value for your employees while also boosting morale, engagement, attraction, retention, and workplace culture, investing in pet healthcare benefits like Vetster for Business is the way to go.

Pet telehealth and telemedicine benefits provide pet owners with 24/7 access to licensed veterinarians, offering timely advice and care that can prevent minor issues from escalating into costly health emergencies requiring expensive surgeries or procedures.

This proactive approach to pet health not only keeps pets healthier but also makes pet parents more knowledgeable and reduces the frequency of insurance claims.

Employers who provide pet healthcare benefits demonstrate that they care about the well-being of their employees and their families, including their pets.

Want to bolster the benefits offered in your total compensation package? Find out how you can support pet parents in your workplace, and get in touch with our team today.