Dental benefits are the most requested health care item for employees, after medical care has been determined. As a broker, you should have an arsenal of dental plan options in your bag of tricks. As an employer, you should be aware of the various options in the market. According to HealthPlex, here is an overview of what's available:

Indemnity coverage: Under the indemnity option, members are reimbursed up to a fixed limit for treatment rendered by their own dentist. Members select any licensed dentist and are reimbursed up to a fixed amount for services provided. Patients are responsible to their dentists for any differences between the plan's allowance and the dentist's charges. Members will experience lower fees if they stay in network.

Careington Benefit Solutions offers a plan through Assurant that bolts on a discount network combined with an indemnity reimbursement, thereby reducing the out of pocket costs for procedures with participating dentists.

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The preventive incentive: Managed Care Plans are often called "capitation plans" or "DHMOs" (Dental HMOs). Based on the principle that it is less costly to prevent dental disease than it is to treat dental disease, managed dental care significantly controls major dental expenses. Managed care provides more coverage at lower costs. Many services are covered in full, including diagnostic and preventive treatment and multi-year rate guarantees can be offered.

With managed care, services are provided through a network of dentists whose interest is to bring the patient to a state of good dental health as quickly as possible and to maintain this healthy condition. This type of dental plan is an insured product.

Preferred Provider Organizations (PPO) dental plan: Another insurance plan is the PPO which falls somewhere between an indemnity plan and a dental HMO. This plan allows a particular group of patients to receive dental care from a defined panel of dentists. The participating dentist agrees to charge less than his/her usual fees to a particular patient or group of patients.

If the patient chooses to see a dentist who is not designated as a preferred provider that patient may be required to pay a greater share of the fee-for-service. This type of plan can provide deeply discounted rates, thereby providing substantial saving to the patient, as long as the patient stays in network. Unlike the more restrictive DHMO, however, the patient may choose to forfeit the savings to see an out-of network provider.

Direct reimbursement plan: A dental plan that is becoming a more popular choice is the direct reimbursement plan. This is a self-funded plan and not typical insurance; the employer pays for dental care with its own funds rather than paying premiums to an insurance company. The patient pays the full amount directly to the dentist and then submits a receipt for the services rendered to his/her employer. Then employer reimburses the patient for all or part of the cost depending on the specific plan design. Your company may reimburse 100 percent of some dental costs, and a smaller percent of other dental costs. There may or may not be deductibles and annual maximums based on the benefits provided in the particular plan.

Administrative Services Only (ASO): This arrangement is when a third party charges a set fee to handle some or all of the administration of a self-funded dental plan. Administrative services provided could include just about any insurance company service such as actuarial services, underwriting, claims processing, provision of a dental network, benefit description, etc. An ASO plan always excludes the assumption of risk and it is therefore NOT insurance.

Point of Service (POS) dental plan: Members can go in or out of the Managed Care Network. Members may choose a managed care provider for some services and a provider that is not in the managed care network for other services. Members will experience lower fees if they stay in network.

Dental discount plan: This type of plan is NOT insurance. With a dental discount program local dentists have agreed to accept reduced rates from plan members. There are no premiums, exclusions, waiting periods. Plans in the market can be found through Aetna, Careington, Health Allies, DenteMax, and a few regional plans including DentalSave, based in New York. Look for companies that own their dental networks, not just resell them.

Dental's growth

According to an annual joint report from the National Association of Dental Plans and the Delta Dental Plans Association, at the end of 2012, more than 187 million Americans had dental coverage, an increase of 11 million people from the previous year.

Most of the reported growth in dental enrollment can be attributed to an increase in employment, researchers said. Researchers also said the recent launch of the exchanges also provides an additional avenue to expand dental coverage in future years.

There were some follow up notes of good news as well, and conditions for pediatric care are going to incrementally improve with the Patient Protection and Affordable Care Act. Additionally, the report found the following statistics to be encouraging:

  • The trend toward DPPO products is continuing among commercial products with 78 percent of all commercial dental benefits.
  • The percent of enrollees making some financial contribution toward their coverage was 99 percent for Discount plans, 93 percent for DHMO plans, 94 percent for DPPO plans, but only 45 percent for Dental Indemnity plans.
  • The population that receives dental benefits coverage through Individual policies and products doubled from last year; up from 2.4 percent to 5 percent.
  • Less than 0.5 percent of dental benefits are integrated with medical policies and 99.5 percent are provided under a separate dental policy.

PPACA influence

According to HealthSpan, for employers with fewer than 50 employees, the pediatric dental portion of the essential health benefits DOES apply both in and outside the exchanges in 2014. For employers with 50 or more full-time employees, the essential health benefits are assumed to already be covered with their current benefit plans. Employers of this size can continue to offer their traditional dental plans. So there are no changes until 2016 for groups of 50 or more full-time employees. Pediatric dental benefits include the following:

  • No annual maximum
  • No lifetime maximums
  • The addition of maximum out-of-pocket limitations  (varies by each state's definition)
  • Coverage for medically necessary orthodontia (subject to each carrier's definition)
  • Pediatric dental based on one of two plan designs:
    • FEDVIP (Federal Employee Dental and Vision Insurance Program) – "rich" benefit
    • CHIP (Children's Health Insurance Program) – "skinny" benefit

If you qualify for lower insurance costs in the government's exchanges, you may use any money remaining after you purchase health insurance to buy dental insurance. Cost sharing subsidies do not apply to dental. The maximum out-of-pocket works much as it does for medical insurance.

Out-of-pocket costs include your expenses for pediatric dental care that aren't reimbursed by insurance: deductibles, coinsurance, and copayments for covered services. However, the maximum out of pocket only applies to pediatric services received in-network. Out-of-network services, pediatric services that are not part of the essential health benefits, and adult services are NOT included in the maximum out of pocket expense.

Purchasing a stand-alone dental plan either on or off the exchange can satisfy the pediatric dental requirement, according to Delta Dental. You do not have to purchase dental coverage through a medical carrier. This is important to know because if you purchase dental through a medical carrier, you (or your employee) will pay a much higher amount before the dental benefits are covered at 100 percent; the dental services that are part of a medical plan must meet the higher deductible and out-of-pocket maximums of the medical insurance. The bottom line is there is no need to disrupt your plan or your employees' dental benefits.

So, it's time to choose your smile factor. When you plug in the calculator and visit your CPA and tax attorney, make sure that the dental plan you select makes sense.

It doesn't necessarily have to cost a lot, but it should take care of at least your basic needs. Anything beyond that is extra. Oh, and one last thing. Providing a quality dental program to the people that work for you, or your client, is a great way to hire and keep good employees. That's worth the price of admission alone.

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