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Benefits Column

Is Dental Insurance A Valuable Benefit?

The cost of twice-yearly dental care may be less than the premiums many employees pay for their dental-benefits plans. HR leaders may want to think long and hard, however, before considering eliminating employees' coverage. It's a highly valued benefit -- plus it may drive down some healthcare costs as well.

Monday, June 6, 2011
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As a small business owner, I wear many hats. One of my responsibilities includes making decisions about my benefits.

In theory, this should be an easy task for me. But, since I now pay the entire premium instead of receiving contributions from my employer, I find myself being more thoughtful about how I structure my benefits package.

Medical insurance was a no-brainer, as was setting up my retirement plan and making certain I provided for my survivors via a life insurance policy. Given my background working in and around rehabilitation medicine and disability insurance, I knew that updating my disability-insurance coverage was critical.

I found myself pausing, however, when I looked at dental insurance. You see, in the back alleys of the benefits world, experts often quietly discuss dental coverage as an overpriced benefit.

I started my analysis by looking at my plan design, my dental-coverage utilization and how much I paid in premiums, co-pays and deductibles.

My last group plan was a standard benefits design. After a $100 deductible, it paid 100 percent, 80 percent and 50 percent, respectively, for preventive, basic and major dental services. There was a maximum annual benefit of $1,500 and a lifetime plan maximum of $1,000 for orthodontic services. The insurance company had also negotiated discounts with the providers in its network.

The plan allowed me to seek preventive care twice every 12 months as long as I separated my appointments by 150 days. My annual premium was $600.

But, here's where my analysis got interesting. Historically, I sought preventive care twice a year like clockwork. My dentist and I worked out an intervention plan that included x-rays once a year.

When I reviewed my billing history, I noticed that the discount the dental carrier provided was only a few dollars less than my dentist's regular charges. And, when I looked at the total charges for the year, they were, on average, about $400.

Simple math led me to the conclusion that I "lost" approximately $300 annually.

Maybe my dental experience was atypical. But, it turns out that I'm not unusual. According to the American Dental Association, most people who seek treatment incur annual costs just below $300.

As a person who knows my way around insurance, I considered the risk I was insuring against. While I have never experienced a dental emergency, I was protecting myself, in theory, against unplanned dental issues.

But, if I ever had a dental emergency or needed major dental services, how much would my dental coverage help me? The answer: up to $1,500 per year.

Costhelper.com estimates that root canals and dental crowns range from $350 to $3,000 per tooth depending upon complexity, materials, location and the dentist's training and experience. Insurance would certainly help offset those expenses.

I would have to hope, of course, that my dentist's treatment and charges lined up with what my dental coverage established as "usual, customary and reasonable."

I decided to turn to my dentist, Robert Antmann, DDS, regarding his experience with dental care and insurance. Convery Dental, of which he is an owner, has been established for 99 years, so he has access to an unusual depth of history and perspective.

Dental insurance began sometime in the 1960s, Dr. Antmann says, and the benefit, at that time, had an annual maximum of about $1,000. The majority of his patients today have an annual maximum benefit of $1,000 to $1,500. Not much has changed in 50 years.

Dr. Antmann's experience is not unusual, according to other sources -- which also project that the typical annual maximum, which was $1,500 in the 1970s, should have increased, via inflation, to $10,000.

So, there are some questions about the bottom-line value of dental insurance. Why would employers offer it? A few reasons.

Most employee-benefits surveys find that dental insurance is the third most employee-requested benefit after medical and retirement benefits. The theory among industry experts is that employees believe this coverage is a tangible benefit they could potentially use every year -- unlike disability or long-term-care insurance.

A 2005 study published in the Journal of the American Dental Association reported that 63 percent of adults with dental insurance visited dentists regularly, compared to 40 percent of adults without coverage.

That may not be true, however, for the 12 percent of adults who have high dental anxiety. HR executives should consider a unique finding of the JADA study: Those employees with dental anxiety who have dental insurance were significantly less likely to visit dentists regularly than uninsured adults.

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Overall, employed adults lose more than 164 million hours of work each year due to dental disease or dentist visits, according to the U.S. Surgeon General's 2011 report on Oral Health in America. The theory put forward by the National Association of Dental Plans is that employees without dental insurance are more likely to lose work due to untreated dental problems.

Dental treatment may also affect medical care, according to a recent longitudinal study by CIGNA (full disclosure: a client of mine), which sought to determine whether periodontal treatment affects the cost of medical care in diabetics. (Experts suggest there is a relationship between diabetes and periodontal disease -- and that both conditions may worsen if either is not properly care for.)

The results of the study indicate that ongoing periodontal treatment of diabetics lowered medical costs in 2008 by an average of almost $2,500. The effect was more pronounced in men than women ($3,200 vs. $735, respectively).

For HR leaders, the issue of whether dental insurance is a benefit that has kept up with the times may be a moot point. Dental coverage is a benefit that employees desire.

Added to that perceived value is the potential impact dental care may have on the healthcare costs of employees who are diabetic and, potentially, pregnant, since the hormonal changes during pregnancy can increase the risk of gum disease in the mother as well as potentially affect the health of a developing baby.

And, you can consider, too, that dental insurance is expanding its reach and services.

Gary Ballman, staff vice president at Anthem-owned Wellpoint Dental, says new enhancements in group dental insurance include international emergency treatment as well as dental analytics, which score providers by utilization and long-term economic value.

The American Dental Association offers some benefit-plan design alternatives to consider, such as a direct reimbursement plan, which may give your employees more coverage flexibility and maintain dental-benefit costs.

As for me, I've elected to forgo dental coverage this year. But, I'll keep my eye on how dental benefits evolve.

Carol Harnett is a widely respected consultant, speaker, writer and trendspotter in the fields of employee benefits, health and productivity management, health and performance innovation, and value-based health. Follow her on Twitter via @carolharnett and on her video blog, The Work.Love.Play.Daily.

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