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Dental Plans

Dental PlansDental Plans and Benefits

Dental benefits aren’t just good for oral health; they’re good for companies that want to recruit and hold onto high-quality employees. 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.

Now more than ever, employers are realizing that dental coverage is an essential, at times differentiating, employee benefit. But simply having dental coverage is not enough; employees are demanding more. Having a flexible, more comprehensive dental benefits package is becoming a competitive advantage for employers. Most of all, employees are asking for choice in choosing the best plan for them. This could include having the option to choose a base coverage level or pay more for more substantial coverage.

 
  • Dental Plan Designs

    Dental Plan Designs

    Most dental plans can be custom-designed, just like medical plans. Traditionally, dental plans aim to emphasize access and prevention. Some basic guidelines to selecting an effective dental plan include the following:

    • Avoiding road blocks that cause patients to delay care
    • Keeping medical treatment separate from dental treatment
    • Structuring plans so co-payments are required for all care other than diagnostic and preventive
    • Limiting exclusions
    • Keeping the language simple
  • Dental Plan Models

    Dental Plan Models

    Though there are numerous types of dental plans, they generally can be divided into two categories: Managed Care and Fee-for-Service.

    Managed Care Dental Plans

    These are cost containment plans that control cost by restricting the type, level and frequency of 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 Preferred Provider Organization 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 Plan (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 co-payment). These are typically the least expensive dental plans.

    Fee-for-Service Dental Plans

    These are freedom-of-choice arrangements under which a dentist is paid for each service according to fees established by the dentist.

    • 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 actual treatments received. This type of plan can be cost effective for both employers and employees.
  • Consumer Driven Dental Plans

    Consumer Driven Dental Plans

    Following a growing trend in the medical benefits field, 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 employer costs in the long run
    • Employees have more awareness of what they spend on dental, making them more financially responsible
  • Controlling Cost

    Controlling Cost

    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 incurred to cover dental expenses to be paid by the participant before benefits are paid by plan for additional services. Many plans have very low or no deductibles for preventive and diagnostic services to encourage preventive care.
      • Coinsurance: Stated percentages of covered expenses that plans and participants each pay. Percentages can vary with type of service, to motivate participants to consider costs of alternative treatments.
      • Maximums: Amounts of benefit dollars 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 – without excluding too much that the plan loses value for the 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. If you want to self-administer your dental plan, then this can be a good option.
    • Using a self-insurance plan to attain cost and administrative savings. When claims are low, administrative fees also drop.
  • Maintaining Quality and Value

    Maintaining Quality and Value

     

    Plans remain valuable to employers if they offer:

    • Hassle-free administration
    • Strong networks
    • Good savings and value
    • Inexpensive, yet appropriate benefits
    • Opportunities to integrate with medical plans under one vendor

    Plans remain valuable to employees if they offer:

    • Ease of use
    • Customer service
    • Quality of care
    • Fast claims processing
    • Flexibility and choice in coverage

    Though rising benefit costs may be squeezing your dollars, your employees (and potential future hires) likely see the benefit in dental coverage.