California’s New Pet Insurance Law Adds Tough Coverage Requirements: How Businesses Can Offer It at No Cost

California has just introduced new regulations that tighten coverage requirements for pet insurance, making policies more comprehensive and consumer-friendly. With an increasing number of employees seeing pets as part of their family, businesses have an opportunity to enhance their benefits packages by offering pet insurance—at no cost to the business. Here’s what you need to know about the new law and how it impacts both employees and employers.

The Rise of Pet Insurance in California

Pet insurance is growing fast. In 2022, the U.S. pet insurance market grew by 23.4%, with California leading the charge as one of the top markets for insured pets. According to the North American Pet Health Insurance Association (NAPHIA), nearly 4 million pets in the U.S. will be insured by the end of 2022, and this number continues to climb as pet ownership grows. 70% of U.S. households now own a pet, and many pet owners consider their animals part of the family, making their health and well-being a priority.

Key Changes Under the New Law

1. Mandatory Coverage for Hereditary and Congenital Conditions

The law now requires insurers to offer policies that include coverage for hereditary and congenital conditions. This is a big win for pet owners, as these conditions can be costly. For example, treating hip dysplasia, a common hereditary issue in dogs, can cost between $1,700 and $4,500 per surgery. Now, policies must cover these expenses, giving pet owners peace of mind.

2. Transparent Policy Terms

The law mandates insurers to provide clear and detailed policy information, including what is and isn’t covered. A study by NAPHIA revealed that 40% of pet owners were previously unaware of critical exclusions in their policies. This transparency helps prevent unpleasant surprises when a pet needs medical care and ensures that pet owners know exactly what they're paying for.

3. Stricter Claims Processing

Another key element of the law is the requirement for faster and more efficient claims processing. 22% of pet owners have faced delays in claims payments, according to industry surveys. With the new standards, insurers must process claims more quickly, ensuring timely reimbursement for pet owners.

Offering Pet Insurance at No Cost to Employers

As pet insurance becomes more comprehensive, businesses have a unique opportunity to offer it as part of their benefits package, enhancing employee satisfaction and retention. What’s even better is that companies can offer this benefit at zero cost to the business.

Here’s how it works:

1. Voluntary Employee Benefit Pet insurance can be offered as a voluntary benefit, meaning employees pay for the coverage themselves through payroll deductions. This setup requires no financial contribution from the employer but provides immense value to employees, who often struggle to find affordable pet insurance independently.
2. Group Discount Rates Employers can work with insurance brokers, like Holistic Employee Benefits, to negotiate group discounts on pet insurance. With group plans, employees can save up to 15% on premiums, while the employer simply facilitates access to the policy. Offering discounted pet insurance can be a significant perk for employees—especially as 68% of workers consider pet insurance an important part of a benefits package.
3. Boosting Employee Morale and Retention Pet insurance is more than just a trendy perk. Research shows that employees who feel their company cares about their well-being—including their pets—are more engaged and loyal. 65% of employees said that pet-friendly benefits influence their decision to stay at a job. By offering this benefit at no cost to the business, companies can improve employee retention without increasing overhead.

The Impact of California’s New Law on Businesses

The recent changes in pet insurance laws mean better coverage for employees and their pets, but potentially higher premiums. However, by offering pet insurance through group plans or voluntary payroll deductions, businesses can still give their employees access to top-tier coverage without shouldering any costs.

For employers who already offer pet insurance or are considering it, the tougher requirements ensure that employees will get better value, such as coverage for hereditary conditions and more transparent claims processes. The result is a more satisfied workforce, at no additional expense to the business.

California’s new pet insurance law ensures that policies are more transparent, inclusive, and reliable, giving pet owners the coverage they need. For businesses, this presents a great opportunity to offer an in-demand benefit that improves employee satisfaction and retention, all without any direct costs. By working with insurance brokers to implement voluntary benefits, companies can offer their employees access to quality pet insurance while staying ahead in a competitive job market. Contact us at holisticeb.com/appt