Get documents about "EBPRGroup Dental Discount Plans Jan07
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Focus On&
Benefits
Group Dental Discount
Plans:
S
It_s percentNotbusinesses with
ixty of small to provide their services to eligible members at
Insurance_It_s Better discounted fees or at atypically
six to 24 employees don_t offer their
employees dental benefits. And that
pre-negotiated
age off of their retail fees. Discounts
percent-
percentage increases dramatically for range from 25_50 percent off of usual fees for
employers with fewer than 10 employees.
Brian Watts the most common dental procedures (includ-
Small employers are beginning to turn to ing exams, cleaning, fillings, crowns, etc.). And
discount plans for ancillary health care services because discount plans aren_t insurance, they
to help them afford the high cost of health care cost much less and offer greater enrollment and
while remaining competitive in the employ- coverage flexibility to both small employers
ment market. Dental discount plans provide and their employees.
affordability and administrative flexibility The non-catastrophic and predictable nature
while meeting the needs of increasingly savvy of dental care has prompted several major ben-
employees who understand that if they can_t efit consultants to predict that discount plans
have insurance benefits, discounts are the next are the future for ancillary health benefits. In
best thing and_in some ways_even better. 2005, Mercer and Watson Wyatt predicted
that High Deductible Health Plans, which can
Why Groups offer integrate discount programs within a pre-tax
savings vehicle (e.g., FSA, HRA, HSA), will be
Dental Benefits a more cost-effective way to provide employee
The incentives and rewards for small dental benefits as medical costs continue to
employers to offer their employees dental ben- rise. Both consultants even went so far as to
efits are many. For decades dental benefits have predict the end of dental insurance within the
been shown to reduce absenteeism, improve next ten years.
morale, and enhance performance. Research Echoes of the Health Allies survey, and a
increasingly shows the link between oral health foreshadowing of the consultants_ survey fore-
and overall health. That research is even begin- cast regarding ancillary discount programs,
ning to show that receiving dental care can could be heard when Medicare introduced
reduce personal medical expenses. its discount pharmacy program in 2004. And
Despite these compelling benefits, there are again, in 2005, when the federal government
still more than 135 million Americans with- expanded their employee benefit choices
out any dental coverage, most of whom are to include voluntary dental discount plans.
employees of small employers who can_t afford Dental discount plans, once perceived as exclu-
the high cost of dental insurance. So what can sive to uninsured individuals, are becoming
small employers offer to their employees that is an integral part of our national benefits. And
affordable and offers meaningful savings? more and more small businesses are now dis-
The solution may be found in a 2001 survey covering that the discount plans are not only
by Health Allies. That survey found that as far more affordable than insurance, but they can
back as five years ago employees understood also provide greater savings on more services
that medical costs were making it difficult for for their employees.
employers to provide ancillary health care ben-
efits, and 86 percent of the employees surveyed
simply wanted access to discounts for those affordable and Flexible
services which their employers couldn_t afford. for employers
Employees even indicated a willingness to pay There are several reasons why small employ-
for access to discounts. ers are adopting discount dental plans. Topping
the list is low cost, ease of administration, and
Dental Discount Plans: a growing realization that discount plans offer
employees real value.
a Growing trend Cost is the number one reason why small
Discount dental plans are non-insurance employers don_t offer a dental plan, and discount
programs in which a panel of dentists agrees
employee Benefit Plan review January 2007 1_
Focus
On&
plans address this problem with very except possibly exacerbate a dental " true, verifiable, and enforceable
affordable fees and flexible enrollment condition, increase their costs, and discount fees_plans should be
options. Typical employee rates are threaten their health. able to demonstrate that the sav-
generally less than $10 per month, Dental insurance plans also ings they promise are real and
with family rates typically below $15. exclude many popular services such that their contracts enable them to
Companies who can_t afford this fee as teeth whitening, dental implants, enforce the discounts; and
can still offer their employees a dis- and orthodontics (braces). Dental dis- " a dispute-resolution system_which
count plan on a voluntary basis via count plans can provide savings on all helps members resolve provider
payroll deduction. And discount plans of these services without limitation. access and discounted fee disputes.
don_t have the dreaded _minimum Annual benefit maximums are
employee participation_ requirements another standard feature of dental Network size is also important
that prevent many small employers insurance plans that may prevent since plan discounts will not apply
from offering a plan. One additional employees from receiving needed to non-participating offices. Make
bonus is that there is no renewal care. Discount plans don_t have sav- sure the plan has sufficient provider
sticker shock. In fact, most dental ings limits. So, by eliminating wait- choice for all interested employees,
discount plans can be purchased with ing periods, discounting all services, and if the plan includes specialists,
multiple-year rate guarantees. and not limiting plan savings, dental that_s an added bonus. Specialty care
discount plans afford employees the can be very expensive, so discounts
immediate, ultimate benefit: letting them decide for root canals, gum treatment,
what dental services they want extractions, and braces can save
comprehensive, and done, when they want them, and employees significant money.
unlimited savings without limitation as to how much The National Association of
for employees they can save. Dental Plans offers a good referral
Employees are beginning to real- tool for discount plans on their Web
ize that dental discount plans offer selecting a Dental site (www.nadp.org).
very real and tangible benefits com-
pared to voluntary dental insurance.
Discount Program
Annual insurance premiums can The key to purchasing a good return on investment
cost up to $500 dollars a year for dental discount plan is verifying in Amid all the gloom and doom of
an individual and more than $1,200 advance that the plan can deliver rising medical costs, there is some
for a family. Since the average per- on its promises. More and more good news for small employers. For
son spends less than $400 a year on states are beginning to regulate just a few dollars a month, they
dental care, it doesn_t take long to discount plans, so check with your can offer their employees a dental
figure that paying expensive dental state_s Department of Insurance (or, discount plan that makes dental
insurance premiums, in addition to in California, the Department of care more affordable. In addition,
deductibles and co-insurance, doesn_t Managed Health Care) to verify that they are also helping employees to
make good financial sense. the plan you have selected is in com- improve their health, which creates
Discount dental plans also offer pliance with state law. In conjunc- greater employee appreciation, pro-
more immediate access to needed tion with verifying state registration ductivity, and loyalty. And that is
care that is often limited, delayed, or licensing, or in case your state the type of dental plan every small
or even prevented by insurance doesn_t provide any current regula- employer can afford. b
plan exclusions and limitations. For tory oversight, make sure the plan
example, voluntary group plans typi- can demonstrate the following con-
cally have waiting periods ranging sumer safeguards:
Brian Watts, RHU, is vice president
from six to 24 months for services of sales for First Dental Health. Mr.
such as fillings, crowns, and ortho- " credentialed dentists_preferably Watts recently helped guide First Dental
dontics. These waiting periods, which that are directly contracted with Health through the regulatory process of
are critical to the insurer_s financial the discount plan to reduce poten- becoming the first licensed discount health
tial confusion with the participat- care plan in California. He can be reached
viability, do nothing for employ-
ing providers; at bwatts@firstdentalhealth.com.
ees with immediate dental needs,
1_ January 2007 employee Benefit Plan review
