Benefits of dental insurance
Dental benefits may seem like just another expense, but the risks of not providing dental benefits could be more costly—including significant medical expenses that could have been avoided and difficulty hiring premium talent due to a lacking benefits package.
Many people make a positive connection between overall good health and maintaining their oral health. In addition, those with dental benefits may have a brighter view of their health and well-being in general.
Basic dental plan models
Most dental plans can be customized, just like medical plans. Traditionally, dental plans aim to emphasize access and prevention.
Managed care dental plans
These are cost-containment plans that control cost by restricting the type, level and frequency of covered treatment, limiting the access to care and controlling the level of reimbursement for services.
- Preferred Provider Organization (PPO): One type of Managed Care plan is a PPO program. Patients select a dentist from a list of providers (network) who have agreed to discount their fees. These plans can be fully insured or self-insured.
- Dental Health Maintenance Organization (DHMO): Another type of Managed Care plan is a DHMO plan, which pays contracted dentists a fixed amount per enrolled family or individual, regardless of utilization. Dentists agree in return to provide specific types of treatment at no charge (or occasionally with a copayment). These are typically the least expensive dental plans.
Fee-for-service dental plans
These arrangements allow you to choose your dentist, and he or she is paid for each service according to fees established by the practice.
- Direct Reimbursement: A popular type of fee-for-service plan is the Direct Reimbursement plan. It is self-funded and reimburses patients according to dollars spent on dental care, not type of treatment. Instead of monthly premiums, employees pay a percentage of the cost of each actual treatment received. This type of plan can be cost effective for both employers and employees.
Consumer driven dental plans
Following a growing trend in medical benefits offerings, many carriers are beginning to offer another type of dental plan: a consumer-driven dental plan. One example is a dental flexible spending account. Benefits of a consumer-driven plan include:
- The tendency to be more customizable for employers and flexible for employees
- Employees have incentives to seek preventive care, which lowers both employee and employer costs in the long run
- Employees have more awareness of what they spend on dental care, giving them more reason to be financially responsible
Controlling costs of your dental plan
- Plan design choices are one way to control the cost of dental benefits. Other ways to control costs include: Requiring employees to pay part of the cost through one or more of these options:
- Deductibles—Amounts that must be paid by the participant before benefits are paid by the plan for dental services. Many plans have very low deductibles or none at all for preventive and diagnostic services in order to encourage preventive care.
- Coinsurance—Stated percentages that plans and participants each pay for covered expenses. Percentages may vary based on type of service, to motivate participants to consider costs of alternative treatments.
- Maximums—Amount of benefit dollars that participants are entitled to for covered services over specific time periods, or for specific types of services. Lifetime maximums are established for certain categories of service, such as orthodontic, periodontal, etc.
- Having exclusions and limitations, which can limit liability and lower cost, while not excluding so much that the plan loses value for employees.
- Including alternate benefit clauses that address common industry practices (alternate methods of treatment, cost differences for treatments, lower prices for customary services, higher prices for higher-cost or cosmetic treatments, etc.).
- Offering a dental maintenance organization (DMO) or a dental provider organization (DPO), both of which are designed to provide savings for sponsors and employees.
- Leasing a dental network from an insurance company. This may be a good option if you want to self-administer your dental plan.
- Using a self-insurance plan to attain cost and administrative savings. When claims are low, administrative fees also decrease.
- Many employers are either increasing employee contribution requirements or transitioning to entirely voluntary plans. Shifting costs in this way helps employers save money but still makes this important benefit available to employees.