Welcome to ThreeFlow's benefit breakdown series, where we dive into the details of a coverage and discuss the most recent trends with the help of ThreeFlow's data and benefits experts.
We talked with underwriting consultant Daniel Henry to help us break down dental insurance. With over four years of experience underwriting dental insurance and over 3,500 dental plans quoted, he's a seasoned expert in dental coverages and options.
How is dental different from most other ancillary products?
In contrast to most ancillary insurance products, dental places more emphasis on preventive maintenance. It's well-known that people who go for regular preventive dental care are more likely to report better overall health. In this sense, dental coverage is more akin to medical and is treated as such when a carrier designs a dental plan.
For example, most dental plans provide easy and low-cost access to preventive care, such as regular cleanings, x-rays, and fluoride treatments. While more costly procedures, like bridges or surgeries, are only partially covered.
What should be considered when choosing to offer dental?
The first thing to consider is how much the group values dental insurance as part of a complete benefits package. When a group has higher enrollment, they'll get a better price. So, it's essential to make sure that employees will enroll in it.
Then, you'll want to consider what provisions to include. Most employees just want good network coverage and basic procedures, like cleanings, covered.
Additional items, like orthodontics or implants, aren't typically offered by default but can be added at an additional cost. If the group does value this coverage, you may want to do a cost-benefit analysis to see if the price is worth it.
From there, you can analyze which plan design works best for the group.
What are the most common dental plan designs?
There are three standard dental plan designs: Preferred Provider Organization (PPO), Dental Health Maintenance Organization (DHMO), and indemnity.
Traditional PPO plans allow an insured to choose from in- and out-of-network dentists. These plans use coinsurance to split the risk between carrier and employee.
DHMO is a low-cost option that allows employees to choose a dentist in the carrier's network and have procedures done for a cost that has been pre-defined by the carrier and dentist. It has out-of-pocket costs but still saves money compared to not having coverage.
An indemnity plan is a good choice if there isn't much network coverage in the area where employees live, like in rural or remote areas. Indemnity is like a combination of the PPO and DHMO. Similar to DHMO, you aren’t limited to in-network providers. But there’s a coinsurance schedule similar to a PPO.
What does ThreeFlow's data show regarding dental plan designs?
At ThreeFlow, 99% of dental plans use the PPO option, with a large majority of those being a passive PPO plan with a 100/80/50 coinsurance formula. In this plan design, the plan covers 100% of preventive services, 80% of basic services, and 50% of major services. Passive PPO plans have the same coinsurance levels for in- and out-of-network services. So, an insured employee can receive services at a discounted rate from a PPO provider, while still having the flexibility to choose an out-of-network provider.
If groups want to offer a truly valuable benefit, dental is number two in our book, right behind medical. It has a very high utilization rate—one study shows that nearly 43% of the population uses dental care services, and about 35% of those visits are for preventive care. Additionally, it can be as low cost to the employers as they want it to be, so it's a great value-add for any benefits package.
Want to learn more about ThreeFlow's underwriting consulting capabilities? Request a demo today. And stay tuned for more of our Benefit Breakdown series, where we'll dive into a particular line of coverage and discuss what ThreeFlow's data shows on trends.