Dental health coverage is the second most requested benefit — right behind medical insurance. Yet many companies have been canceling dental plans to cut costs, even though dental health insurance costs about onetenth of what medical insurance does. Before canceling a dental plan, consider selecting another model that may keep your costs down and your employees satisfied.
According to the National Association of Dental Plans (NADP), about 20 percent of dental enrollees are covered by a voluntary plan, in which the participating employees pay all the premiums or fees, not the employer. Voluntary dental plans allow companies to offer benefits at group rates, with reduced (or no) employer contribution.
Dental Plans Galore
There are a number of models of dental plans, generally divided into two categories: managed care and fee-for-service. Managed care dental plans are cost-containment programs that generally restrict the type, level and frequency of treatment. They provide limited access to care and control the level of reimbursement for services. Fee-for-service dental plans are typically freedom-ofchoice arrangements under which a dentist is paid for each service rendered according to the fees established by the dentist. Here are some more details:
Preferred Provider Organization (PPO) programs are managed care plans that allow patients to select a dentist from a network of providers who have agreed, by contract, to discount their fees. If patients go outside the network they may face higher deductibles and co-payments. The good news for employers is that PPOs can be fully insured or self-insured, so you have full funding flexibility. PPOs are usually less expensive than comparable fee-for-service plans and are regulated under the appropriate insurance statutes in the company’s state of domicile and operation.
Dental Health Maintenance Organizations (DHMOs) pay contracted dentists a fixed amount (usually on a monthly basis) per enrolled family or individual, regardless of how much dental care they provide. In return, the dentists agree to provide specific types of treatment to the patient at no charge (for other treatments, a co-payment is required). Theoretically, the DHMO rewards dentists who keep patients in good health, thereby keeping costs low. DHMO models typically offer the least expensive dental plans.
Direct Reimbursement (DR) is a selffunded dental benefits plan that reimburses patients according to dollars spent on dental care, not type of treatment received. It allows the patient complete freedom to choose any dentist. Instead of paying monthly insurance premiums, even for employees who don’t use a dentist, employers pay a percentage of actual treatments received. Moreover, employers are removed from the potential responsibility of influencing treatment decisions due to plan selection or sponsorship.
Benefit gap
Dental insurance benefits under many plans have remained at the same level for more than two decades, leaving patients to pick up any remaining costs out-of-pocket. In recent years, payment options have emerged to help patients bridge the gap between what their insurance covers and the total cost of care. Some plans now offer features similar to cell phone payment plans, allowing members to roll over unused benefits or to share benefits with other insured family members. With many plans having annual benefit limits as low as $1,000 per individual or $3,000 per family, benefit-sharing features help employees and dependents who need extensive dental care get the care they need.
Welcome changes
Many dental insurers have also incorporated consumer-directed health features into their benefit designs, such as tiered networks or consumer decision-support tools. Look for online tools that allow enrollees to calculate how much they spend on dental benefits each year in order to estimate needed contributions into a health savings account. Employers that provide dental coverage have found it to be a very popular benefit – one people actually use. It’s visible, it’s valued, and the price is right.