Pet Wellness Plans Are Not Insurance — What You Are Actually Prepaying For

The legal definition draws a hard line

The NAIC's Pet Insurance Model Act (#633), adopted at the Summer 2022 National Meeting, defines a wellness program as "a subscription or reimbursement-based program that is separate from an insurance policy that provides goods and services to promote the general health, safety, or wellbeing of the pet."

The same act defines pet insurance as "a property insurance policy that provides coverage for accidents and illnesses of pets." Those are two different products under two different bodies of law. A wellness program is a service contract. Insurance is a promise to pay for a fortuitous event you cannot predict.

Banfield, which runs the largest wellness plan program in the country, says it plainly on its own product page: "Not insurance — it's an Optimum Wellness Plan." The company describes the arrangement as paying "in monthly or yearly installments for the package of services included." That is an accurate description of what almost every wellness plan is.

What the model act requires sellers to tell you

Section 6 of Model #633 exists because regulators concluded consumers were confusing the two. It bars an insurer or producer from marketing a wellness program as pet insurance, and from marketing a wellness program during the sale, solicitation, or negotiation of pet insurance. If a wellness program is sold alongside insurance, the act requires all of the following:

• Buying the wellness program cannot be a requirement of buying the insurance policy.
• The costs must be separate and identifiable from the insurance premium.
• The terms and conditions must be separate from the policy.
• The wellness program's benefits must not duplicate coverage already in the policy.
• The seller must disclose, in 12-point boldface type, that wellness programs are not insurance, plus the insurer's service number and the state insurance department's contact details.

There is a mirror-image rule in Section 5: if an insurer writes wellness or other non-insurance benefits into the policy form itself, those benefits become part of the insurance contract and are regulated as insurance. Section 6C states it directly — coverages described as "wellness" benefits inside the policy are insurance. So the same word can describe two legally different things depending on which document it sits in.

Where the act actually applies

Model acts are templates, not law. States have to enact them. As of the NAIC's Summer 2025 state page for Model #633, sixteen jurisdictions appear in the Model Adoption column: California, Delaware, Florida, Hawaii, Louisiana, Maine, Maryland, Mississippi, Montana, Nebraska, New Hampshire, Ohio, Pennsylvania, Rhode Island, Vermont and Washington. Most other states show no current activity.

If you live in one of those states, the disclosures above are enforceable requirements. If you don't, they are still a good checklist — a seller who cannot meet them is telling you something.

The three rules that only apply to real insurance

The protections in Model #633 attach to the insurance policy, not to the wellness plan. Three are worth knowing because they have direct dollar value.

• A 15-day free look. Unless you have filed a claim, you may examine and return the policy within 15 days of receipt for a full premium refund, paid within 30 days of the insurer receiving it back. The notice has to be printed on the first page.
• Waiting periods are capped. A waiting period may not exceed 30 days for illnesses or orthopedic conditions not resulting from an accident, and waiting periods for accidents are prohibited outright. Insurers must also offer to waive the waiting period after a completed medical exam.
• The insurer carries the burden of proof. On a preexisting condition denial, the model act puts the burden on the insurer to prove the exclusion applies to the condition you claimed for.

A wellness plan gives you none of these. It typically has an enrollment fee, a 12-month term, and a cancellation clause that recovers the retail value of services you have already used. That is a normal service contract — but if you cancel in month four after the annual dental cleaning, expect a bill, not a refund.

How to run the math before you sign

Because a wellness plan is prepayment, its value is a straight arithmetic question: does the package cost less than buying the same services one at a time?

1. Write down the included list. Banfield's adult dog tiers, for example, are structured as two comprehensive exams per year, core vaccines, two fecal exams with deworming, and a heartworm/tick-borne panel; higher tiers add a dental cleaning, bloodwork, urine testing and a percentage discount on other services.
2. Price each item at your own clinic. Ask for the à la carte price, not the plan price. Our figures for vaccinations shot by shot, routine bloodwork and a dental cleaning are a starting point, but local prices vary widely.
3. Add the enrollment fee and multiply the monthly figure by 12. The plan's real annual cost is 12 monthly payments plus enrollment, not the sticker number on the brochure.
4. Discount the discount. The percentage off other services only pays if you actually use other services at that clinic. Treat it as zero unless you have a reason not to.
5. Check the lock-in. A 12-month term at one hospital chain is a decision about where you take your pet for a year, not just a payment.

Note that pricing for these plans is set locally — Banfield's own site asks for a location before showing a figure, and third-party reviews quote wide ranges. Do not plan around a national average you read somewhere. Get the number for your hospital.

Where wellness plans genuinely win

The honest case for them is budgeting, not savings. A plan converts a lumpy $600 year — where a dental cleaning lands all at once — into a flat monthly line item, and it removes the decision point where an owner skips a cleaning because this month is tight. For puppies and kittens, where the first year is a dense series of visits, the bundled price can also be genuinely competitive.

What a wellness plan will not do is pay for the emergency. If your dog tears a cruciate ligament or swallows a sock, the wellness plan contributes nothing beyond whatever percentage discount it carries. That is the event insurance exists for, and the reason the two products are sold together is that neither one covers the other's territory.

The questions to ask at the counter

• Is this insurance or a wellness plan? Ask for it in writing.
• What is the enrollment fee, and what is the total 12-month cost?
• What happens if I cancel in month three after using a service?
• Does anything here duplicate what my insurance policy already covers?
• Is the plan tied to one hospital or chain?
• If it is insurance: what is the waiting period, and can it be waived with an exam?

If you already hold a policy, the way an insurer converts your bill into a payment is a separate question — two insurers can pay very different amounts on the same invoice, and that difference is usually larger than the price of any wellness add-on.

The short version

A wellness plan is a prepaid service package with a defined list and a term. Pet insurance is a regulated contract that pays for accidents and illnesses and carries a free look, a capped waiting period, and a burden of proof on the insurer. Sold well, they do different jobs and can sit side by side. Sold badly, the wellness plan gets described as "coverage" and the buyer discovers the difference at the worst possible moment.

Prices and plan contents change, and state law differs. Confirm current terms with the insurer or hospital and with your state insurance department before you buy. This article is about cost and contract structure. It is not veterinary advice; talk to your veterinarian about your pet's care.