Most employers want to help their employees take care of health care needs beyond footing their hospital bills, from covering urgent care to keeping them healthy in spite of chronic conditions.
Empowering employees to take care of their dental health is important to many employers. Even if dental health is not always top of mind, dental issues can be just as debilitating, leading to lost time and reduced productivity, which could be why dental is such an in demand benefit.
An employer that helps workers deal with dental health can go a long way toward earning those employees’ loyalty and enthusiasm. Offering dental insurance can lead to happier employees and higher retention of the talent you trust.
However, the choice of what kind of dental insurance plan to offer—and how to split costs between employer and employee contribution—can be tricky.
For starters, here are the four major types of dental insurance that employers can consider.
1. Preferred Provider OrganizationPPOs are the most popular type of dental plan for employers. They parallel regular medical PPO plans in negotiating lower rates with preferred dentists in their network. Some PPOs even cover visits to an out-of-network dentist for a higher co-pay. Most PPOs are "100-80-50" plans: When an employee goes to a preferred provider, the plan covers 100 percent of preventative services, 80 percent of certain basic procedures, and 50 percent for major services such as crowns.
However, not all procedures are covered, and PPOs frequently have a calendar-year maximum and deductibles. Most of these plans also have waiting periods for complex procedures such as crowns, to prevent people from signing up just to get major dental work and then cancelling when the ordeal is over.
2. Health Maintenance OrganizationHMOs for dental care, like medical HMOs, offer a closed network of dentists. These plans have no waiting periods or deductibles, and no annual maximum on benefits or claim forms to fill out. Dental HMOs are excellent for preventive services, such as cleaning and X-rays, which are typically covered at 100 percent. Most other covered procedures require a co-pay. However, these types of plans tend to limit major and/or restorative procedures. They often pay 50 percent or don't cover the procedure at all.
3. Indemnity Dental InsuranceAlso known as “traditional” insurance, dental indemnity insurance plans operate under a “fee for service” structure. The main advantage of an indemnity plan is that it allows employees to visit any dentist. Indemnity plans pay a set amount based on a pre-calculated “usual, customary and reasonable” fee. Very often, employees must pay an additional amount out of pocket. The annual maximum benefit is usually about $2,000.
With an indemnity plan, employees generally have to pay their share of the cost of service up front. Some providers require payment of the full amount and the insurance company then reimburses the employee.
4. ACA CoverageThe Patient Protection and Affordable Care Act, also known as Obamacare, allows individuals to obtain dental coverage through the federal insurance marketplace as part of a health plan or as a standalone dental insurance plan. An additional benefit for parents is that pediatric dental services are included in the ACA’s essential health benefits. ACA plans can’t impose annual dollar limits, including for pediatric dental coverage. However, plans can limit the number of annual pediatric dental visits.
Picking the Right PlanWith these choices in mind, how do you pick the right one?
Employers considering adding dental insurance to their package of benefits might consider asking employees what their priorities and unmet dental care needs are before making that choice. For example, in a small town with only one or a few dental clinics, an HMO might make sense. In a larger city, where employees may commute long distances and want a dentist close to home, the PPO may be the preferred choice.
The bottom line is that dental insurance is the most popular voluntary benefit an employer can offer. The cost of providing this option can be well worth the benefit to the company in lower turnover and absenteeism, as well as higher engagement.
An upcoming blog post will examine some ways employers can continue to lower costs even after they make the choice of type of plan. It's all part of the effort make a dental plan feasible, and affordable, for a small business.