Employee Dental Insurance for Every Budget

Dental health coverage is the second most requested benefit—right behind medical insurance. With a variety of plan types, any employer can find an affordable dental insurance plan to enhance its benefit package.

A fully insured dental plan typically costs no more than 10 percent of the cost of medical coverage, and annual increases are much smaller — usually falling in the single digits. Even nicer, employees who have access to dental coverage tend to use it.

Coverage Options

Although prices vary by region, group and plan, the following generally represent the most to least expensive coverage options:

• Dental indemnity plans. Employers pay a monthly premium for this traditional insurance plan. Members then select their own dental provider; the plan will reimburse the provider for covered charges. Many policies encourage regular preventive care by covering 100 percent of the cost of preventive services (such as semiannual cleanings and annual x-rays) after the member meets the annual deductible. Plans generally require a copayment, such as 20 percent, on restorative treatments, which include fillings and crowns. Some plans also cover orthodontics, typically at a lower percent.
• Dental PPO and HMO plans. Like managed care health plans, these fully insured dental plans attempt to control patient spending by steering members to network providers, who have negotiated fee agreements with the insurer. A PPO (preferred provider organization) plan will reimburse the cost of covered services a member obtains from an out-of-network provider, but at a lower percent, such as 50 percent. Many HMO (health maintenance organization) plans will not cover charges from out-of-network providers, except for emergency treatment.
• Direct reimbursement plans. In a direct reimbursement plan, the employer creates a written plan, agreeing to reimburse employees up to a certain amount for dental services every year. Employers can determine the annual cap on benefits (usually from $500 to $2,000 per employee per year), as well as what sort of services the plan will cover. When an employee receives dental care, he or she pays up front, then submits receipts for reimbursement. Employers can handle claim verification and reimbursements in-house or hire a third-party administrator to do this.

  Although the Affordable Care Act prohibits health reimbursement arrangements for major medical expenses, employers can provide direct reimbursement plans for “ancillary” benefits, such as dental and vision care.

• Discount dental plans. Employers may buy discount plans for their employees, or offer them on an employee-paid voluntary basis. For the cost of about $72 annually, plans promise to save enrollees 15 to 50 percent of average costs for a variety of dental services, such as fillings, braces, exams and routine cleanings. Plans often include discounts on cosmetic procedures that most dental insurance plans exclude. Before offering employees a discount plan, however, check whether the benefits are worth the enrollment fee. Some dentists will discount services for uninsured patients or for payment in full at time of service. Dental discount plans also lack the protections of other options, since state insurance departments do not regulate them and most states do not require licensing. Dentists can opt not to accept discount plans at any time, so employees should check before scheduling expensive work.
• Voluntary dental plans. With voluntary plans, employees who want dental insurance buy individual dental insurance plans at a discounted rate and pay premiums through payroll deduction. Larger groups may be able to obtain group coverage, which usually costs less, if enough employees participate. The employer has no expense or paperwork, since the insurer handles all administration, including enrollment. With the addition of a premium conversion cafeteria plan, employees can pay their premiums with pre-tax dollars and enjoy a 25-40 percent tax savings on their premium payments.

Oral health has a very strong connection to overall health, and dental benefits encourage your employees to get regular dental care.