Dental Insurance Business Guide: Understanding Your Company’s Dental Benefit Plans

Many business organizations like to provide dental insurance plans for their employees. This helps to maintain an overall good dental health for the workforce, and also serves as an important incentive to motivate the employees. The employers must understand various dental benefit plans carefully in order to choose the most appropriate plan to suit the needs of the group and fit the employer’s budget. The goal of the employer must be to choose a plan that offers maximum dental coverage for the employees at the minimum cost to the business.

If the employer is seeking dental insurance coverage for a significant number of employees, it improves the chances of getting a better price because of the large volume of business. Employers should understand that they have a good bargaining power to achieve lower rates of insurance for their employees. In a highly competitive dental insurance market, the insurance providers are willing to offer very attractive rates in order to get group insurance contracts from employers.

Benefits

Group Dental PPO Plans

Preferred Provider Organization or PPO plans for dental coverage are popular with many employers for various reasons. These plans offer sufficient flexibility to the insured individual to choose the dentist or dental specialist as required. The insured employee can avail dental services at very low pre-determined rates from a network of preferred dental service providers. In case the employee wishes to choose a dentist outside the network, the PPO plan still covers a part of the expense incurred by the employee at such out-of-network dentist.

Group Dental HMO Plans

Health Maintenance Organization or HMO Plans for dental coverage are usually less expensive than dental PPO plans. Many business organizations prefer these plans for their employees if the organization is operating on a tight budget for such dental insurance coverage. Under these plans, the insured employee can receive subsidized rates for dental care from a network of dentists. However, if the insured employee wishes to receive dental care from a dentist outside the network, the HMO dental plan does not reimburse even a part of the dental costs incurred in such case.

Group Dental Indemnity Coverage Plans

These are traditional dental coverage plans or fee-for-service dental insurance plans, which are preferred by certain employers. These plans provide a greater flexibility of the choice dentists for the covered employees. A typical dental indemnity insurance plan does not involve a specific network of dentists, and the insured employee is free to receive dental care from any dentist of choice. The cost of care is covered up to a prescribed limit by the insurance provider.

Dental Plans Make Economic Sense

As per the American Dental Association, dental health benefits consistently rank among the most sought after benefits among the employees. Employers who are sensitive to the needs of the employees and try to offer them the best benefits within a limited budget usually consider dental coverage for their employees. It makes excellent economic sense because such benefits tend to push up the motivation levels of employees and boost organizational productivity.

Pitfalls

Regulatory Limitations

Employers as well as dental insurance providers are subject to federal and state laws with regard to dental insurance coverage for the employees. In most cases, the employers are not allowed to provide such benefits selectively to a few employees, while ignoring some other employees. This may lead to charges of employee discrimination against the employer. Similarly, the employers may be required by law to contribute a certain minimum percentage in the cost of such plans, and the remaining amount may be contributed by the employee.

Technical Challenges

Group dental plans are typically cheaper than individual insurance plans. However, maintaining records of such insurance for all employees may be a complicated affair. Many companies are not fully equipped to handle such complex records for dental insurance coverage. Some companies try to overcome this challenge by outsourcing the record maintenance to external agencies.

Inter-organizational Limitations

Many large companies have different subsidiaries that may operate as independent profit centers. This gives autonomy to a particular subsidiary to decide whether such dental insurance benefit must be offered to employees or not. This may lead to inter-organizational conflict if certain group employees enjoy the benefit of dental coverage, while others are deprived of it.

Insurance for Leaving Employees

Business organizations are usually mandated by law to provide dental coverage even to an employee who is leaving the organization. The coverage at the group rates must be provided for a certain minimum amount of time. This may increase the accounting burden of the company to maintain records for former employees who have no interest in the organization any longer.

Pricing

Employers should evaluate their long-term financial position and costs of dental insurance carefully before providing such benefits to their employees. Once the employees are dependent on such benefits, it may become very difficult for the company to withdraw such benefits at a later date. Furthermore, the company must analyze all potential benefits and incentives and choose dental coverage only if it offers the maximum value for money for everyone. Group insurance rates must be negotiated well in order to minimize the company’s costs of employee insurance.

Dental insurance coverage is an excellent benefit from the point of view of most employees in any organization. It can serve as a great tool of employee motivation and enhance the loyalty of employees towards the organization. However, with the rising costs of dental care, the insurance costs have also risen in a similar proportion. Therefore, employers must tread with financial prudence and take the appropriate decision regarding such dental coverage benefits for their employees.