Pet health insurance as an employee benefit? AVMA hopes so

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Pet health insurance will one day be among the pretax benefits available to the nation's employees if the AVMA has its way.

The Association intends on asking Congress to pass legislation amending Section 125 of the Internal Revenue Service Code to include pet health insurance as an option offered in so-called cafeteria plans.

Participants in cafeteria plans can choose to receive certain benefits on a pretax basis. Depending on what an employer offers, benefits can include group term life, medical, accident, and disability insurance, and adoption assistance.

The AVMA Legislative Advisory Committee proposed having the AVMA Governmental Relations Division lobby Congress to add pet health insurance to the code before the close of the congressional session this year. The AVMA Executive Board approved the LAC recommendation at a teleconference Aug. 18.

The recommendation does not name a particular pet health insurance policy or provider, only that it be included as an employee benefit.

Board members supported the proposal because they believe it is consistent with the AVMA's policy on pet health insurance. The policy states, in part, that, "The AVMA endorses the concept of companion animal health insurance that provides coverage to help defray the cost of veterinary medical care."

Timing is critical to getting the legislation passed—at least during the current 110th Congress. That is why the board was asked to decide on the proposal in August instead of waiting until its regularly scheduled November meeting, explained Dr. Larry Kornegay, Executive Board member and LAC chair.

At press time in September, Congress was in the final days of its session, and the chances of new legislation being introduced at this point were slim. Moreover, Sen. Wayne Allard, an AVMA ally and the most likely sponsor of the amendment, is serving his final term in the Senate.

"Senator Allard's been one of our key supporters on the Hill and has always worked with us. That's why getting this done this session is so important," Dr. Kornegay said.

Dr. Kornegay believes offering pet health insurance as an employee benefit would resonate with millions of pet-owning Americans. "I can see where the option of using pretax dollars for pet health care would be popular when we have 60 percent of U.S. households with pets," he said.

Also helping the bill's chances is its subject matter: pets, a topic most legislators tend to look on favorably, Dr. Kornegay added.

Dr. Mark Lutschaunig, director of the AVMA GRD, agreed that the bill's pet-specific focus will be an asset during lobbying for its introduction and passage. "This is the type of issue that, when we talk to people about it, they'll say, yeah, that sounds great," Dr. Lutschaunig said.

One of the challenges the GRD will face, however, is convincing legislators that the benefits of allowing pet owners to dedicate a portion of their pretax salaries to pet health insurance outweigh the financial costs to the federal government.

"We're in very difficult budgetary times, and this proposal would reduce the amount of taxes taken in by the federal Treasury," Dr. Lutschaunig explained, "Congress will require cuts in other parts of the federal budget to offset the income lost by this proposal."

Even if the pet-owner friendly legislation isn't introduced in the 110th Congress, the AVMA will be looking for lawmakers to sponsor the provision when the next session convenes in 2009.