Dental insurance: picking your plan

Your employees may not love going to the dentist, but they sure love the option.

It’s not just the experience of trying to answer the dentist’s questions through a mass of cotton and metal while raucous game shows or tedious soap operas play on television. There’s also the hit to the household budget for dental procedures that (like semi-annual cleaning) are necessary, but (unlike the annual physical) are not covered by most health insurance plans.

That’s why dental insurance is the most popular voluntary benefit employers provide to their workers.  

The Kaiser Family Foundation’s 2017 survey of employer health benefits found that, among firms that offer health benefits at all, 67 percent of small companies and 97 percent of large companies offer dental benefits to their workers.

The reasons for the popularity of employer-based dental plans are clear: According to NerdWallet, the average price in the United States for a root canal ranges from $762 for a front tooth to $1,111 for a molar. Even a bi-annual cleaning costs as much as $200. These costs may explain why seven out of 10 Americans say they don’t go to the dentist at all year after year.

Insurance Plan or Savings Plan?

Should an employer consider adding full dental coverage to its package of benefits—or simply offer a discount/savings plan? Let’s compare.

Dental Savings Plans offer a discount of about 10 percent on dental care services for a relatively low annual fee.  Also known as “discount  plans ,” this option offers discounts to employees who use participating dentists.

Discount services are typically offered to employees at their worksite for a set fee paid through payroll deduction. The downside is that a discount of, say, $75 off on a $750 root canal still leaves the employee facing a $675 bill. It’s helpful, but not the best way to win hearts and foster employee loyalty on a long-term basis.

Dental Insurance usually pays most of the cost of complicated procedures and may pay the whole cost of biannual cleanings and annual X-rays, which will catch problems before they become serious.

When searching for plans, you may also want to consider one that offers solutions for your specific needs. For example, your employees may have children who need braces. In this case, a plan that provides optional orthodontia benefits would offer more flexibility than a one-size-fits-all dental option.

Which option is the best?

Determining which type of plan is best depends upon the unique needs of your workforce. As with the shift to managed care for general medical  plans , the lines of distinction between  dental  plans are blurring. 

The first decision might be whether to choose an open or closed plan.  Open systems, which operate like PPOs, allow participants to choose their own dentist. They offer services for a greater number of people over a wider geographical area than closed panels. They usually cost participants more in out-of-pocket costs than a closed system, but they do give your employees greater choice. 

In closed systems, which operate like HMOs, participants can get services only at specified facilities through a limited number of providers who are paid by salary or a fixed amount for each patient.

Closed panel systems can be a good option for employers that are located in a limited geographical area and have a relatively fixed budget for such benefits. They also offer greater opportunity for quality and cost controls.

However, limited accessibility and freedom of choice are serious considerations for closed plans, especially for employers in metropolitan areas. Employees who commute long distances may have a hard time finding dentists conveniently located to their homes if the system is closed .