Breaking Down Dental Benefits Options for Employers
According to the Canadian Dental Association, in 2013, Canadians spent 12.5 billion dollars on dental services. The most recent statistics also show that 62% of Canadians have some sort private dental insurance with varying levels of coverage. These statistics suggest that Canadians care about their oral health and that most employers want to offer some form of dental insurance to better incentivize top talent.
While setting up a group dental plan might seem like the most obvious solution, there are other dental coverage options for companies and their employees to consider. Learn about each dental insurance option below and find out why more clients are choosing to set up a Flexible Benefits Plan.
Option 1 – Individual Dental Insurance
Some organizations might not have the budget for dental plan coverage. In this case, employees or even self-employed individuals can seek out their own individual dental insurance. There are many options available for individual dental plans, and offerings from each insurance provider are unique. This means it’s very hard to compare individual plans and so those interested would merely need to choose a plan and stick with it.
While individual insurance might seem like a good idea at first, here is something to consider: when signing on to an individual plan, there is usually a waiting period of six months and in some cases 3 years, before any specialty services such as crowns, root canals, and such will be covered while you pay full premium. This allows the insurance company to build up enough capital to cover future services. Coverage options tend to be fixed and offer a limited degree of reimbursement (e.g. 70% of 80% basic services which consist of cleanings and fillings to a maximum of $500 or $1000), generally much less than what a group plan can offer. While every situation is unique, clients interested in individual dental plans should really consider if it is worthwhile.
Option 2 – Group Dental Insurance
Most employers will consider group dental insurance as an added-value benefit, and they can customize an offering that will be given to all employees. Customization can include the amount of cleaning hours that are covered (a.k.a. scaling units), the frequency for eligible cleaning, and percentages covered for more high-valued specialty services. The employer can also decide to cover the entire premium cost or split the cost with their employees, ranging anywhere between 50% and 100% of the dental premiums covered by the employer.
The nice thing about group plans is the claims are spread across numerous employees. So even if someone submits a high-value dental claim, those that are just doing general maintenance will balance it out, mitigating against an increase in premiums upon renewal.
Working with an experienced benefits consultant will also help employers select an insurance provider who will do due diligence on claims submissions. Why is this important? Dentistry can be very subjective. Some dentists might want to suggest high-valued procedures that might not be necessary today, and some might be suggesting dental procedures that are not necessary at all, while consumers are none the wiser (Read more about this here). For this reason, insurance providers have their own dental consultants that can flag suspicious claims. There are two advantages here – 1) the employer avoids rising premiums caused by unnecessary high-value dental claims and 2) the employee avoids having to undergo procedures that they might not need.
Option 3 – Health Spending Accounts
Another option for organizations that do not offer a group dental plan or those that are covering the minimum 50% of premium costs of their group dental plan is setting up a health spending account. A health spending account provides the employee with a set dollar amount that they can use for any qualified health-related expense. In some cases, this can include anything from massage therapy, nutritionist services, gym memberships, personal training and of course, dental services.
In the case where there is no group dental plan in place, an employee can allocate all or some portion of their health spending account to their oral health. The health spending account can also be used to pay for dental expenses that exceed the insurable amounts of an established group dental plan. The dollar value of the health spending account is decided by the employer, which ensures the budget is respected.
Potentially the Best Option – The Flexible Benefits Plan
The appeal of health spending account is that it provides tremendous flexibility. In fact, more organizations are looking for more flexible options for health and dental benefits. These organizations recognize that when it comes to benefits, it’s not a one size fits all for employees. Single parents have different needs than recent graduates, and both of them have different needs than mid-life managers raising families and senior executives on the verge of retirement.
This increased demand for greater flexibility has led to a new offering called Flexible Benefits Plans. This one of most advantageous options for companies today. While you can read more about Flexible Benefits Plans in our recent article titled “Get a Flexible Benefits Plan That ‘Fits’ Every Employee”, a Flexible Benefits Plan lets employees choose the health services and coverage they need while keeping the employer on budget.
A set monthly allowance and the choice of different levels of coverage allows the employee to decide if they even want or need dental services, or if they prefer to receive more coverage for other health-related services instead. The Flexible Benefits Plan is really the perfect choice for any organization as it lets employers stick within the framework of their budget, while putting the decision-making of options and services in the hands of the people who use the benefits.
If you would like to review your dental benefits plan, or if you want to learn more about our exclusive Flexible Benefits Plans, contact our team. We are always happy to help our clients get the most out of their benefits plans by offering their employees the best option.