Did you know that dental insurance is made up of 3-4 different parts? Bud explains good dental coverage and what to look out for when selecting a plan.
I’m thinking about adding a dental insurance plan to my company’s benefits package. Would you recommend it for a small company? Are all dental insurance plans the same?
Gaps In Ancillary Coverage And Not Teeth OK
After medical insurance, dental insurance is the second largest premium-generating group benefits product. I’d argue that it’s not an ancillary benefit, as much as it’s a critical part of a core benefits package. As I’ve talked about in previous columns, employees base job acceptance and retention decisions on the benefits an employer provides, and most assuredly, dental insurance has become an expected benefit.
To answer your questions, yes, I do recommend dental insurance regardless of company size, and no, all plans are not created equal. I think it’s important to understand how dental insurance plans are put together. Almost all dental plans are made up of the following parts:
- Part 1 Preventative – oral exams, cleanings, x-rays, sealants, and fluoride treatments
- Part 2 Basic – root canals, extractions, fillings, and scaling
- Part 3 Major – inlays, crowns, caps, dentures, implants, and other serious dental issues
- Part 4 Orthodontia – optional for dependents under the age of 19
A typical, good dental insurance plan provides the following benefits coverage:
- Part 1 Preventative: 100%
- Part 2 Basic: 80%
- Part 3 Major: 50%
Similar to medical insurance plans, most dental insurance plans are offered with both in- and out-of-network benefits, deductibles, coinsurance and copays. The biggest difference between medical insurance plans and dental insurance plans is that dental plans have an annual maximum benefit. Once reached during the calendar year, no additional benefits can be paid until the plan resets at the beginning of the next calendar year or the plan anniversary. This annual maximum varies from $1,000 to $2,000. Higher amounts are available on custom plans.
Some people find it helpful to think of dental insurance like a savings account that you pay into every month—and then access when you have a big expense like a crown, cap, or root canal.
When selecting a dental insurance plan, here are three things to look out for:
- Make sure the out-of-network benefits are acceptable because many PPO dental insurance networks are limited in size.
- Don’t overbuy on high annual maximums or add orthodontia if the majority of your employees don’t have dependents who’ll use the benefits.
- Dental insurance plans with employer-paid premiums have lower rates compared to voluntary plans where employees pay their own premiums. (This difference in rates can sometimes be 25-40% higher for voluntary plans.)
There are several great dental carriers. Have your broker shop several for you before you decide.
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