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Benefits with teeth: dental plans keep workers smiling.

Employers who like to see workers smile should consider this: Dental care is, overall, a fairly inexpensive benefit to add to existing packages. According to Jim Stanbrough of Delta Dental Plan of Indiana, the cost is usually 5 to 10 percent of what a medical program costs. And for that small investment, companies get a large return in employee satisfaction.

"It's a benefit that works for them," he says. "With most other benefits, you don't get anything unless something happens: You get sick, you get in an accident or you die. Only then do those benefits work for you."

When considering establishing a dental benefits plan, employers have a few different options. They can opt for regular insurance, self-fund and administer the benefit themselves, or combine the two.

With a traditional package, employees may use a dentist of their preference. This type of program, generally, has higher premiums, but the employees have freedom of choice.

As the health-care industry moves to a more managed-care approach, so does dentistry. With a managed-care type of dental program, employees are given a list of participating providers, and often get better benefits for lower premiums. Employers can save 15 to 25 percent in premiums by using a managed-care system over a traditional package.

The savings occur "because the dentists have agreed to accept a lesser fee than they would ordinarily," Stanbrough says, "because potentially they may get more volume of patients vs. if they were not a member."

While managed care doesn't offer quite as much choice as a standard plan, there's another way to achieve total choice, says Jim Woolf of CompDent Corp. in Indianapolis. With a combination plan, employees specify at the time of enrollment whether they want to continue going to their dentist (even though the dentist may not be part of the network), or go with a managed-care system.

There's yet another option that some companies find attractive: self funding. "Dental health care is predictable and preventive in nature," says Jim Gould, director of dental benefit services at the Indiana Dental Association, "whereas medical can be catastrophic." Because dental care is predictable, and not everyone uses it anyway, companies may find they save by foregoing the premiums and instead self funding.

Simply, a non-insurance direct-reimbursement program uses an expense-account approach. An employee goes to a dentist of his or her choice, pays the bill, obtains a receipt to present to the employer, and is fully or partially reimbursed in a short period of time. The employer pays only for the benefits used.

Because participants must pay the cost up front and then be reimbursed, they tend to spend wisely. "Employees become aware of what the costs are," Gould says. "They become the consumer again."

Any limits or exclusions are set by the employer. Whether it's paying a certain percentage, setting a maximum limit or paying only for certain procedures, the company makes the rules. Employers can also design special options if they're concerned that their employees will have trouble paying up front for some potentially high-priced services.

About 200 Hoosier companies have adopted this type of plan, and Gould says some have saved 25 to 50 percent over standard plans. Nevertheless, some employers balk at the idea of direct reimbursement. Gould says some believe the idea to be risky, while the dental association maintains it is not. Also, some companies may not want to deal with the administrative side of the expense-account plan.

Countering the second concern, Gould says there are software programs available to help. Or, all the administration can be turned over to a third-party benefits company. If assistance is needed, a company may call upon a local dental association for consultation. Also, if a complaint has been made about a dentist, the association has a peer review board to address such issues.

But while dental care is not as complex as other forms of medicine, Stanbrough of Delta Dental maintains that it's not child's play, either. "We believe the biggest advantage of regular insurance is just having a third party specialist managing those claim costs with experience and expertise," he says. A company with a direct-reimbursement plan probably doesn't have anyone with a dental background on staff to ensure services were warranted.

But an insurance company doesn't have to be totally out of the picture, CompDent's Woolf says. A company that wants to self fund a dental program can still work with an insurance company.

"All they do is administer claims so that the employer doesn't have to fool with administering claims," Woolf says. The employer pays the administrative costs and the dental fees, but no premiums.

"The real opportunity for savings comes with the best of both worlds--self funding with a managed-care alternative," Woolf says.

With this plan, employers use "a self-funded plan to reduce administrative costs and then a managed-care alternative to address claims--because self funding does not address treatment patterns."

From the employee's perspective, this system works more like an insurance plan than direct reimbursement. The employee undergoing a rather expensive procedure, for example, would mostly likely pay only the co-payment up front, and the insurance company would process the claim and cover the remaining part of the bill. The employer then reimburses the insurance company.

"We provide the employer with reports on where the money was spent, what kind of services--whether it was a specialist or a general dentist," Woolf says. "And then we provide them with consulting services on how to best spend their money."

There are perceived advantages and disadvantages to each of these plans. But in most cases, the employer can custom design a plan to meet the company's and the employees' needs.
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Title Annotation:dental insurance benefits to workers
Author:Gilbert, Jo
Publication:Indiana Business Magazine
Date:May 1, 1993
Words:943
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