Pet debt pitfalls — how clients can help ease the burden

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When Mike Rosenbaum’s 6-year-old border collie Ringo had an allergic reaction to a spider bite in 2009, the dog’s skin became necrotic and he went into organ failure. It would take two and a half years of treatment, which included more than 20 procedures and eight weeks in the ICU, to save Ringo’s life. In total, the vet bill would cost Rosenbaum about $80,000.

“I was a single guy, making a good living,” Rosenbaum says. “I was fortunate enough to be able to afford this, but there are so many families who can’t. So many families with loved ones who don’t have the financial means when an animal is able to be saved. I told the vet, you do the healing and I’ll write the checks.”

Ringo would go on to live another 10 years after his treatments were completed. Rosenbaum finally had to say goodbye to his friend last year, but says he doesn’t regret a single cent spent on Ringo’s treatments.

“He just had a great heart and that’s what powered him through all that,” Rosenbaum says. “Your pet is a family member, there is no question.”


Rosenbaum isn’t alone in considering a pet to be a member of the family. Many employees will go to great lengths to take care of their animals. About 45% of pet owners will spend the same or more on an animal’s healthcare than on their own, according to a LendEDU survey of 1,000 pet owners. Of those surveyed, 10% of pet owners say they had missed a payment on another bill in order to pay for petcare.

Pet insurance is becoming a more popular benefit and there is a small but growing number of employers that offer pet insurance as a benefit. Data from the Society for Human Resource Management indicates that 15% of employers offer the benefit to workers, up from 9% in 2015. Employers who offer pet insurance benefits include Microsoft, Chipotle, Deloitte and T-Mobile.

With the increasing sophistication of veterinary medicine, animal healthcare costs are rising and there may be more of a need for employers to offer pet insurance, says Chris Middleton, senior vice president and general manager of insurance company Pets Best.

It is estimated that Americans will spend $75.38 billion on their pets in 2019, according to research by the American Pet Products Association. That sum includes food, supplies, over the counter medicine, vet care, purchasing the animal and miscellaneous costs. That is a rise from the $72.56 billion spent last year and a rise from the $69.51 billion spent in 2017.

Americans are expected to spend $18.98 billion on veterinary care alone in 2019 versus the $18.11 billion spent last year.

Pet insurance is a growing trend with 2.43 million insured pets in North America, according to the North American Pet Health Insurance Association. That figure represents an 18% increase from 2018. The pet insurance industry as a whole reached a $1.42 billion benchmark earlier this year.

Also see: The cat is out of the bag: Pet-friendly perks are a must have

“The increasing human animal bond is playing a significant role,” Middleton says. “Thirty years ago, the dog was in the backyard and maybe the kitchen; 10 years ago, he was in the house and now the dog is in the bed. Now, more than ever, people consider pets to be part of their family.”

Some of this growth also has to do with demographics. When Middleton first joined Pets Best about 10 years ago the typical consumer was a woman over the age of 45, whose children had all left home. Today, millennials make up the majority of pet insurance holders.

“Pet insurance is a very commonly requested benefit and employers make it available in a variety of ways,” Middleton says. “Offering it on employee discount sites is common, but we’re increasingly seeing employers use it on a payroll deduction basis.”

The number of employers offering Pets Best insurance as a payroll deduction has doubled in in 2019 from the year prior, Middleton says. Employers are beginning to integrate pet health insurance in the enrollment experience for supplementary insurance and making it more visible in the enrollment process.

Pets Best offers other pet perks besides insurance, including a 24/7 pet health helpline. Employees can use this line to ask a number of pet related questions, everything from potty training a new puppy to health and behavioral issues.

“It’s been an extremely popular benefit with our users,” he says.

While pet insurance may not be able to entirely eliminate the burden of paying for high veterinary expenses, it can help significantly. Elizabeth Entenman, a Hudson Valley, New York-based freelance writer, went into thousands of dollars of credit card debt in order to treat her black labrador, Pearl, when she was diagnosed with cancer.

Entenman has Healthy Paws pet insurance for Pearl — who is now cancer free — which she says helped to reduce the total cost of care. She has a 60% reimbursement rate and a $750 annual deductible. She was reimbursed $5,958.25 for Pearl’s treatment, which included x-rays, CT scans, a biopsy, surgery, five rounds of chemo and follow up consultations.

“It helped in the sense that it was nice to get those checks back,” Entenman says.

Although she still struggled to cover the difference, not getting Pearl treatment simply wasn’t an option. Pet insurance is essential and is something employers should consider offering, along with other pet specific benefits, she says.

“Benefits skew toward people who have children,” she says. “There were times where I would be asked to travel for work and I would have to pay a ton of money in kennel fees and it was always like God, there are just no benefits for people with dogs.”

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Pet insurance Voluntary benefits Benefit communication Benefit strategies Benefit management Employee retention Employee communications