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Marshall Liger has been in the veterinary space since 1997. As a practice management consultant, he enjoys the opportunity to help practices achieve the sustained forward momentum they deserve. Learn more at ligerveterinaryconsulting.comRead Articles Written by Marshall Liger
One of the greatest debates in veterinary practice management is this: Which employee fringe benefits should we offer so that our clinics stand out against the competition? A critical reason for that question is that veterinary professionals have left the industry in droves over the past couple of years, forcing practice leaders to ponder how they can retain and attract top talent without breaking the bank.
Potential employees tend to take jobs that offer a mix of fair wages, on-the-job perks and fringe benefits. A robust benefits package in today’s competitive market can make the difference between a candidate choosing your practice or the one down the street that offers similar base pay.
Providing subsidized or fully paid pet health insurance as an employee benefit could round out your practice’s compensation and benefits package.
Benefits to the Employee
Veterinary professionals are animal lovers. We understand how owning pets brings joy and fulfillment to our lives. As a result, we tend to adopt and take care of more than our fair share of the pet population. The reality then becomes that pet care costs are among the biggest expenses in many of our employees’ households. That is why, according to a Veterinary Hospital Managers Association member survey, over 90% of clinics offer pet care discounts as an employee benefit.
This CE opportunity is made possible by the support of MetLife Pet Insurance Solutions LLC.
But what if a team member’s pet needs an urgent medical procedure or specialized service that your practice cannot provide? An in-house discount won’t help in those situations. According to CareCredit, the average cost of a veterinary emergency hospital visit is $800 to $1,500. Advanced care can run into the thousands of dollars, of course, so at that point, how many of your employees might decline care?
However, your employees can use their pet insurance at emergency and specialty hospitals as well as your practice. The benefit could save your team members thousands of dollars and show you care about the total health and wellness of their pets.
Additionally, a Capital One study concluded that 73% of Americans rank finances as the No. 1 stressor in their life. Stress correlates directly with work performance. Stressed employees have difficulty concentrating and recalling information, and they tend to perform below standards. Simply put, offering pet health insurance as an employee benefit can go a long way in reducing the stress of veterinary costs.
The group of practices I work for has offered pet insurance to its employees for nearly a decade. We found that our team members are far more comfortable talking to clients about insurance because they are covered. They see the advantages and share their experiences. Such bonding resonates with clients far more than handing out an insurance brochure.
Some of our employees tell real-life stories of late-night visits to an emergency clinic and how they could focus on their pets’ health and not the debt they would have had to accrue to pay for the services. In the case of my dog, Maypop, a 10-year-old Cavalier King Charles spaniel, having her insured causes me much less stress when she sees a veterinarian. (Shall I remind you how unhealthy Cavaliers are?)
Benefits to the Employer
Pet health insurance is a winner for three chief reasons.
1. Lower Costs
Before offering another employee benefit, a veterinary practice owner or manager must consider many factors. In the case of pet health insurance, is there room in the budget? Minimizing the tangible cost of such a program is possible.
For example, a practice providing insurance no longer discounts the cost of veterinary care for an employee’s pet. Therefore, the practice makes a fair margin on services rendered, and the clinic generates additional revenue. Such a return on investment can outweigh the cost of the insurance premiums. Additionally, non-discounted services won’t depress the earnings of an associate veterinarian who is compensated based on production.
In the care of Maypop, the hospital has recouped more money than the cost of her insurance premium, resulting in a win-win-win for the practice, Maypop and me.
2. Better Pet Care
Employees who can’t afford veterinary care at their practice are thrust into an awkward position. However, pet insurance all but alleviates the unease and ensures that we honor one of our core values: providing high-quality, progressive medicine. A side effect of that is our team members are more confident when presenting treatment plans to a client because they perceive our services as a fair value and something they would gladly approve for their pets. The practice leaders also show that they care about the well-being of their team members and the employees’ pets. We all want to see our teams grow and flourish personally and professionally, so what better way than pet insurance to show you care?
3. Improved Recruitment
The pool of job candidates is shrinking in nearly all hospital departments. In such an environment, you must ask, “What makes our practice stand out to potential employees?”
A Glassdoor survey showed that 60% of the respondents strongly consider the employee perks and benefits before accepting a job offer. In the same study, 80% reported that they would prefer additional benefits over a pay increase. Therefore, offering a benefits package that is attractive and maximizes the practice’s investment in the team is more important than ever.
Any benefits change comes with pros and cons. First, speak with your accountant or attorney before adding pet health insurance as a perk. You’ll want to know whether the coverage would be considered taxable income for the employee. You’ll also want to ensure that the benefit is fair and equitable for all employees.
One challenge in your decision-making process might be calculating the cost of monthly premiums. Some insurers can assist you, the employer, in offering the program.
Practice leaders also must determine how many employee pets are covered. For example, is the number unlimited, or will it rise incrementally based on a person’s tenure? Also, does the insurance apply to more than cats and dogs?
Other challenges you might face are mostly logistical and unique to your practice. When considering offering pet health insurance as an employee benefit, ask yourself:
- How will we manage accounts receivables? In other words, must our employees pay the veterinary bill upfront and await reimbursement from the insurance company?
- What happens if a pet is denied insurance coverage?
- If the insurance policy doesn’t cover wellness services, will we provide them at a discount?
- What will the monthly premiums cost?
- What are my state’s insurance regulations?
- What are the chosen insurer’s policy terms?
Your practice also must be aware of legalities, such as conflicts of interest in the case of veterinarians treating their pets and then submitting claims. Consult your attorney.
Taking a good, hard look at your practice’s benefits package is an excellent first step in becoming more attractive to prospective employees. Employee benefits and on-the-job perks work in conjunction with wages to create an attractive and well-rounded compensation package that shows potential and current team members your practice is willing to invest in their success and that you care about their quality of life. In today’s competitive market, the ongoing conversation centers on what we can do to ensure our employees are paid a comfortable wage and relieve them of the financial stress that can cause poor performance.
- Only licensed insurance agents can give comprehensive insurance advice and guidance.
- To help any pet owner — employee or otherwise — you might want to visit Pawlicy Advisor at pawlicy.com. It’s a marketplace for pet health insurance that allows pet owners to compare options.
- Insurance is not a one-size-fits-all product.
NEARLY 4% oF U.S. DOGS ARE INSURED
Americans spent a record $2.59 billion on pet health insurance in 2021, extending coverage to 3.9% of dogs and 1% of cats. Spending jumped by 30.4% year over year.
Kristen Lynch, executive director of the North American Pet Health Insurance Association, attributed much of the strong showing to societal and behavioral changes. The industry trade group reported the figures in its 2022 State of the Industry Report.
“A record number of household pet adoptions and purchases during the pandemic, combined with continued work-from-home arrangements and pet owners’ desire to mitigate unexpected veterinary costs, have contributed to even higher growth rates in the past several years,” Lynch said.
NAPHIA’s board president, Rick Faucher, sees a bright future for the industry, which in the United States consists of about 20 insurers.
“2021 marked the seventh consecutive year where the pet insurance industry experienced double-digit growth,” Faucher said. “While pet insurance penetration rates have increased to approximately 2.48% in the U.S. and 3.10% in Canada, we recognize that as an industry, we’ve still only captured a small portion of the potential market.”
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This article describes why a veterinary practice should consider offering pet health insurance as an employee benefit. After reading the article, participants will be able to ascertain the value of pet health insurance to hospital employees and decide whether to implement it as a fringe benefit.
1. True or false: Providing pet health insurance as an employee benefit might make future job applicants less interested in your practice.
2. Pet health insurance as an employee benefit can potentially benefit:
a. The employee
b. The practice
c. The pet
d. All of the above
3. All of the following scenarios are challenges to mitigate except:
a. Deciding how to manage accounts receivable for employee accounts
b. How to help employees with pet care that is excluded in their policy
c. Client perception of team members insuring their own pets
d. Complying with tax laws regarding employee benefits
4. True or false: Offering pet health insurance as an employee benefit shows that the practice cares.
5. Employees who have insured pets benefit in which of the following ways?
a. They have coverage 24/7/365 at all veterinary facilities.
b. They have less stress about the financial burden of caring for their pets.
c. They gain confidence in their job because they know they can approve the same treatment plans they present to clients.
d. All of the above.