When it comes to rising healthcare costs, the thought of insurance is a must. In fact, it’s the law of the land according to the Affordable Care Act, but what if you have paws?

Pet insurance is a small, but growing, voluntary benefit with one in three Fortune 500 companies now offering pet insurance. According to research from the Society for Human Resource Management, 9% of organizations say they are offering pet health insurance in 2016, a 5% jump since 2011.

“The market is small, but growing,” says Scott Liles, president and chief pet insurance officer at Nationwide. And there are a number of reasons driving the growth, he adds.

The most obvious, he says, is the close emotional bond employees feel with their pets. “Pets are treated less like work animals and more as a member of the family … hanging out in the den and often sleeping in bedrooms,” he says.

Sixty-five percent of U.S. households own at least one pet, according to a recent Harris Poll, with more than $15 billion being spent on veterinary care in 2015.

And that leads to the second driver for the rise in pet insurance offerings, Liles says. Veterinary costs are skyrocketing and it’s becoming more and more expensive to take care of the furry friends.

And it isn’t that vets are trying to gouge consumers on the price of care, but really just the evolving techniques and technologies used in the industry, says Deana Single, director of group accounts for Nationwide.

“They can do more to keep pets healthier, but it costs more,” she says. “Health insurance is helping folks.”

For employers, the biggest reason they offer pet insurance is as an attraction and retention tool. “The warm, fuzzy benefits like pet insurance keep people happy and increases retention,” Single says.

And for one employer, providing the extra benefit was just a common sense decision.

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“The warm, fuzzy benefits like pet insurance keep people happy and increases retention.”

Trinity Health, a national not-for-profit health system offers a broad menu of voluntary benefits, including auto/home insurance, cancer insurance, life insurance, identity theft protection and pet insurance. The company believes “in providing colleagues with meaningful choices that support their lives and their life goals,” says LaTasha Frye, manager of total rewards benefits and well-being at Trinity Health.

But sometimes even when benefits are offered, employees might not know they’re available or understand how they work, which highlights the need for a more strategized communication effort, Nationwide’s Single says.

“It is just letting people know about it,” she says. “That’s the No. 1 challenge. Many in our own company don’t even know of the benefit, and when they do we see a 7% to 8% spike [in adoption].”

Senior leaders at Trinity were on board with providing the benefit, says Frye, and although there has been no formal feedback from employees, there has been a consistent year-over-year increase in the number of employees using pet insurance since the product was first offered in 2004.

“Offering pet insurance as a voluntary benefit supports employees caring for beloved pets and reminds employees that their employers care about their four-legged family members, too,” she says. “It is a value-added [benefit] for all involved.”

And employees that have it, will use it, Nationwide’s Liles adds. “We see a very, very high usage rate amongst our policyholders,” he says, estimating employees generally use the benefit at least twice a year.

But it’s still a growing industry with room to evolve. “The field is still in its infancy and still growing and will look different five to 10 years from now,” says Kenny Lamberti, director of strategic engagement for companion animals at The Humane Society of the United States. Now, he says, pet insurance is used more for high-cost pet care – procedures that cost $2,000 to $3,000 or more.

Pet insurance is a nice safety net idea, he says. And although there are only a couple of carriers and plans that don’t cover routine care like annual vaccinations, there is still room to grow.

And much like our own healthcare, Lamberti sees pet healthcare evolving in a similar fashion. “The trend is to make it more accessible to more people; it’s exciting,” he says. “Basic vet care hasn’t been as accessible, and is usually a couple decades behind human healthcare. Pet healthcare, and the insurance industry … are moving in a better direction with more people, and pets, having access to care,” he adds.

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