One cat, four cats, 10 cats ... more?

Q How many pets per team member does our practice need to pay for?

"Pet benefits are one of the perks of working at an animal hospital," says Nancy Potter, a Firstline Editorial Advisory Board member and the practice manager at Olathe Animal Hospital in Olathe, Kan. "Wages paid at animal hospitals are typically lower than other healthcare careers, so many of us feel that a pet benefit balances out the wage discrepancy."

Nancy Potter

However, she says, most hospitals are beginning to limit pet benefits for several reasons: first, the employee who acquires several pets and expects to have unlimited benefits for unlimited pets. "This is not only unfair to the employees who have fewer pets but also puts a burden on the hospital owner, who is taking a loss on those services provided as well as the time it takes to treat those employee pets," Potter says.

GETTY IMAGES/BARRY KUSUMA

Another reason: IRS regulations state that discounts of more than 20 percent on services need to be categorized as income on an employee's W2, Potter says. Many hospitals don't comply with this regulation and hope they won't be audited.

"In the future, I think we'll see more of a limit on pet benefits for employees, whether they follow the IRS guidelines, limit the number of pets that an employee can receive discounted services on, or purchase pet insurance as an employee benefit for a limited number of pets," Potter says.

Finally, she says, the employee handbook needs to be clear on exactly what the pet benefits are and whether there's a limit on the number of pets covered. It's also a good idea to specify that qualifying pets must live in the employee's household.