With the ever increasing cost of medical insurance, many employers have dropped their group dental and vision coverage, but the demand for employer-sponsored dental and vision benefits is still present.
Once considered a standard employee benefit, dental and vision insurance plans have experienced rate increases not as extreme as medical rate increases, but increases just the same.
Many group health insurance companies offer dental and vision benefits alongside their medical plan, and include the cost for the dental and vision benefit on the same monthly premium statement as the medical premium. In addition, there are many independent dental and vision companies that specialize in just dental and vision benefits, and these companies can be very competitively priced with excellent benefit schedules.
The most competitively priced dental and vision plans use a "preferred provider" list of contracted dentists and optometrists. If the insured member uses the "preferred dentist" or "preferred optometrist," the benefits are usually better than if a non-preferred provider was used. Preferred providers contractually agree with the cost of the services that the dental and/or vision insurance company consider "reasonable and Customary." Dentists or optometrists that do not have an agreement with the insurance companies about their rates are not under any obligation to charge lower preferred provider rates.
The lists of contracted dental and vision preferred providers have grown substantially over the last five to seven years. Because of the ever-increasing cost of dental and vision services, many insured members are moving to dentists or optometrist on their preferred provider list to make sure that more of their final bill is paid for by the insurance company.
Most dental companies provide service in three main categories: preventative, restorative, and major. Most plans pay for 100 percent of the cost of preventative services once every six months, and these services would include the cost for exams, cleanings, and x-rays. Services provided in the second category, the restorative, or basic service category, are normally paid at between 80 percent and 90 percent of the contracted rate. These services include simple extractions, fillings, and space maintainers. Major work, the third category, includes bridges, dentures, and crowns, and most dental insurance companies pay 50 percer of the cost for these services when the insured member uses a preferred provider. A calendar year deductible of $50 is common with most dental plans, and this deductible is not due for preventative services.
Traditionally, dental plans set their monthly rates based on the maximum amount of benefit that they agree to pay for each insured person during each calendar year. The most competitively priced plans may have a maximum benefit of $750 to $1,000 per member per year. Plans that will pay up to $2,500 per member per year for dental expenses are available with higher monthly premiums.
For families with children under age 19, the orthodontia benefit may be of interest. This additional rider can be included with many dental plans. Dental insurance companies usually pay up to a maximum of $500 to $1000 per child per year. If the same dental policy stays in force over multiple years, most companies will continue to pay the $500 to $1000 orthodontia benefit until they have paid a total lifetime orthodontia maximum of $1,000 to $30,00.
Vision benefits also follow a general rule of thumb with three different benefit categories; exams, lenses, and frames. The majority of vision plans pay 100 percent of the cost for an annual exam with a preferred provider. Most vision plans will pay a set amount toward the cost of lenses and frames. If an insured member wants to have more expensive lenses or frames, a credit is given toward the cost the more expensive lenses and frames, based on what would have been paid for the standard hardware. To help reduce the monthly premiums, many vision plans agree to pay benefits for lenses and frames every other year instead of annually.
In response to employer groups dropping their dental and vision coverage altogether, many dental and vision insurance companies offer voluntary dental and vision plans instead of the traditional employer-sponsored group plans. For traditional group plans, dental and vision companies require that their employer groups agree to pay at least 50 percent of the cost for the employee. If the employer does not agree to the 50 percent employee premium contribution, then a voluntary dental or vision plan could be a consideration.
Voluntary plans are usually priced a little higher than traditional group plans, and they may have longer waiting periods for services, but they still offer valuable benefits. Since employees pay 100 percent of the cost for Voluntary benefits, not all employees may want to take part in the plan, and this is allowable. Most dental and vision companies require a minimum number of participants on the plan, and they bill the employer directly each month for this valuable employee benefit.
Making the decision about which plan is best for you and/or your company is usually based on multiple factors, including the cost and benefits for you and/or your employees. Many dental and vision plans let participants choose what level of service they prefer, all of the way from strictly basic services, all of the way up to full coverage on their "Cadillac" plans. And, like most items that we purchase today, the higher the level of benefit, the higher the cost. Balancing these two items usually comes out to be the hardest part of this decision.
JT Sampson is director of client services for Health Benefits Associates Inc. in Reno. Contact him at 775-828-1216 or jt@healthbenefits.net.
