I woke up on Monday morning to a strangely empty house. The dog was gone.
My dog, a lab mutt, has been a part of my family for 13 years. He was a rescue from the SPCA in North Philadelphia. When we first picked him up, he weighed less than five pounds and was a bit sickly. Apparently, he wasn’t wanted because he wasn’t a pretty dog. His bottom jaw was turned funny making him look somewhat odd. He was so ugly that he was cute, immediately earning the name Lyle, after one of my favorite entertainers (Lyle Lovett).
Lyle knows his place in the pecking order at the house – and it’s pretty close to the top. The kids dote on him. My mom buys him “grandpuppy” gifts at Christmastime. He goes on family vacations with us – and occasionally shows up at the office. I simply cannot imagine life without him.
That’s why Monday morning, at about 2 am, when he was wandering around the house, acting funny, I got worried. I called the vet, concerned that he might have heat stroke since it’s been crazy hot in the northeast. Eventually, we took him into the doggie ER at Penn where we got the official diagnosis: bloat or Gastric Dilation Volvulus. It is the #2 killer of dogs and had we waited a few more hours, Lyle would have died. Thankfully, we got him to the vet on time. The remedy was emergency surgery and it was not cheap. It wasn’t even near cheap. It was, in fact, extremely expensive. But it had to be done. So we did it.
I realize that I am fortunate to be in a position to make that decision based on the health and welfare of my dog and not on whether it means that my children would eat this week. Not all folks are that lucky.
Raising a pet is expensive: estimates range up to $39,000 for the cost of raising a 14-year-old dog. But most pet owners would say that it’s worth it: more than nine in ten pet owners say they consider a pet to be a member of their family, according to a 2011 Harris Poll. And we are a nation of pet owners: more than three in five Americans have at least one pet in the home.
With so many pet owners and so many dollars, it’s interesting that a proposal to allow pets as tax deductions hasn’t yet been made law. Yes, it sounds a little kooky. I even riffed on this idea for April Fool’s Day.
But in a Tax Code that allows deductions for all kinds of expenses from breast implants to lingerie to aquariums, why not?
I’m not all for mucking up the Code for the sake of mucking up the Code but if we’re allowing deductions for certain bona fide expenses, why not others? Former Representative Thaddeus McCotter (R-MI) thought so, too, when he introduced the HAPPY bill (Humanity and Pets Partnered Through the Years), HR 3501 in 2009. The bill, which was heavily critiqued by tax policy gurus, would allow for a tax credit of up to $3,500 per year for qualified pet expenses, not including the purchase of the pet. Qualified pet expenses would include items like food and veterinarian bills. The idea behind the bill (which didn’t become law) was to help families who were forced to make difficult decisions about pet care: offsetting the costs of vet care with a tax credit might help keep pets out of shelters (an increasing problem in difficult economic times).
That’s not the only pet-related tax perk that has been considered and stalled in Congress. Since 2009, there has been a push to allow pet health insurance to be included in the number of employee benefits allowed under Section 125. Section 125 allows employees to pay for certain approved benefits with “pre-tax” dollars. Examples of cafeteria plan benefits include flexible spending accounts, child care reimbursement plans, legal services plans, and life insurance. Why not pet health insurance?
To be fair, our family doesn’t have pet health insurance. By the time I first heard about pet health insurance, my dog had become middle-aged and survived two bouts of Lyme disease, making him a poor candidate for most plans (like human health insurance, a pre-existing condition can be a bar to insurance and hereditary conditions can up your premiums). Since then, I was fortunate enough to meet Laura Bennett, the smart and savvy Co-Founder and CEO of Embrace Pet Insurance. A math geek like me (she’s an actuary with a degree in mathematics), Laura earned her MBA from Wharton, where she dreamed up a pet health insurance concept for the Wharton Business Plan Competition in 2003 (it won first prize).
This week, I called up Laura and asked for her thoughts about how best to keep costs low for pet owners. She, of course, recommended pet insurance as a consideration, noting that the costs of the insurance can make those larger, unexpected costs of pet health care more manageable. If monthly costs are an issue, she recommends seeking out a lower price by playing with premium options: like the cost of health insurance for people, increasing your deductible means a lower premium.
Since many pet owners aren’t familiar with pet insurance companies, she suggested that you do your research, relying on companies like petinsurancereview.com as a potential source of information. Her best tip: skip over most of the positive reviews and go straight to the negative reviews to look for themes; repeating themes of poor coverage or bad customer service are warning signs.
Her final piece of advice, of course, is the one that I wish I had known years ago: buy the insurance before you need it.
Laura is on board with the idea of allowing pet insurance as part of a cafeteria benefits plan for employers. In fact, she’s the one who tipped me to the proposal. It’s been an advocacy issue for the American Veterinary Medical Association for years. While many companies allow payroll deductions for pet insurance, it is not tax-deductible under current IRS regulations. The idea had a head of steam in 2009 but has fizzled in later years.
Interestingly, despite the cracks and jokes about pets as dependents, most Americans tend to favor some kind of tax benefit for pet owners. What hasn’t been settled is what that should be: a deduction for medical expenses? Pets as a dependent? Cafeteria plans for pet insurance? Something else?
I’m not sure where I fall in the spectrum. I certainly think that allowing pet insurance as a cafeteria plan item for all employers makes sense; it’s elective and is in keeping with the spirit of the code section. But beyond that, I’m not certain. What is certain is that I would hate for any pet owner to be faced with the kind of expense that we were faced with this week and have to make the decision to walk away based simply on cost. For all that I know that there are folks out there who are thinking, “It’s just a dog,” I would say that you’re wrong. Just asked my kids: Lyle is so much more than that.
“A person can learn a lot from a dog, even a loopy one like ours. Marley taught me about living each day with unbridled exuberance and joy, about seizing the moment and following your heart. He taught me to appreciate the simple things-a walk in the woods, a fresh snowfall, a nap in a shaft of winter sunlight. And as he grew old and achy, he taught me about optimism in the face of adversity. Mostly, he taught me about friendship and selflessness and, above all else, unwavering loyalty.” – John Grogan, Marley & Me