Is Dental Insurance Worth It in the Scheme of Employee Benefits?

Employers spend significant time and resources choosing and funding their benefits packages. Health insurance plans, paid time off, retirement options, and more unique perks like catered lunches and bring-your-pet-to-work days may be up for consideration.

While health insurance is considered the most valuable employee benefit (67% of workers feel this way, according to a recent study), some employers wonder: Is dental insurance worth it, too? Does providing dental insurance benefit the employer, and do employees appreciate it enough to offset the cost? Let's answer this question today.

What do dental policies usually cover?

Insurance coverage will vary, but most dental plans cover all kinds of dentistry except for cosmetic dentistry and surgery. Plans will mainly differ in the amount of coverage for each service and in how employees will pay for what isn’t covered. Depending on the type of plan, an employee may have a copayment, coinsurance, or a specific dollar amount to pay for a given service.

Various dental insurance plans cover most or all of these dental services and can be broken down into these general areas:

• Preventive care
• Basic care
• Major care

Preventative care

Preventative dental care includes things like exams, cleanings and X-rays. Since these are considered necessary steps toward preventing costly dental problems, dental visits for preventative services are usually covered 100% by a dental plan or with a small copayment per visit.

Basic care

Basic care covers basic procedures involving issues like extractions or fillings. A root canal may or may not be included at this level of coverage. The insured will have either a copayment or a coinsurance. In some cases, as with a dental health maintenance organization (DHMO), it may be a specific dollar amount.

Major care

Major care involves more extensive procedures, and as such, these services are covered to a lesser extent. There is often a waiting period and a separate lifetime maximum amount of coverage for major dental services. Examples include crowns, root canals, implants, dentures and bridges.

Most plans will not cover cosmetic dentistry procedures, as these are considered non-essential to the employee’s dental health. Cosmetic procedures include bleaching, veneers and bonding. Payment for such services would be the employee's responsibility in almost any dental insurance plan.

How does offering dental insurance work for employers?

Employers can choose from different options for employee dental insurance plans, including more basic to more comprehensive coverage. Typically, they can also choose how much they want to contribute toward the plans and how much employees will need to pay out of pocket. These decisions will ultimately determine dental insurance costs for both parties.

Voluntary plan

Under this type of plan, employees pay monthly premiums to access company dental benefits. This plan lets employees access group insurance rates and pay premiums with pre-tax dollars. Voluntary plans are the less costly option for employers.

Contributory plan

Employers pay some or all of the dental insurance premiums under this plan type.

Dental discount plans

This membership program gives employees discounts on covered services at specific dental providers. Either employers or employees must cover the annual fee to participate.

Having options gives different sizes of employers a way to offer dental benefits to their employees that won't break their budgets.

Is dental insurance worth it, considering the pros and cons that impact the employer?

Making dental benefits a part of your organization's overall benefits package has its potential positive and negative impacts. Here's what to consider.

Pros of offering dental insurance

Advantages to the company include:

• Fostering employee appreciation. Dental benefits aren't a given, which makes employers who offer them stand out from those who don't.
• Improved employee health. Good oral health practices elevate your employees' overall well-being. Plus, preventative care minimizes time off for major dental work.
• Elevating your employer brand. Job candidates will be impressed with the company that offers the most robust benefits packages.

Cons of offering dental insurance

The cost of dental insurance is the main holdup of adding it to an employer's benefits package. Depending on the type of insurance and the amount an employer contributes, it can be a burdensome expense.

So, what's the verdict?

Reportedly, millions of work hours are lost annually due to employees' needs for dental care. Addressing dental issues promptly, from a preventative and/or early treatment standpoint, can prevent the need for advanced care later. Making dental care accessible and affordable to employees helps organizations avoid lost productivity and improve employee well-being.

If possible, adding dental insurance to your benefits package will likely be worth it.

What does dental insurance reimbursement mean for the employee?

It means employees will have to pay for dental costs but will later be reimbursed for their dental expenses, typically through a direct reimbursement insurance plan.

Some employers offer direct reimbursement dental insurance coverage plans, also known as fee-for-service or indemnity plans. For these plans, an employee will often be responsible for paying the costs of their visits to the dentist and then receiving reimbursement later.

How an employee gets reimbursed

With a direct reimbursement plan, the employee receives service from a dentist and then pays the entire bill. The employee then submits a copy of the bill to the insurance provider and is reimbursed for the cost. It’s important the employee also sends a receipt of their payment to ensure the reimbursement isn’t sent to the dentist’s office.

The benefits of direct reimbursement

Direct reimbursement offers employees plenty of options in terms of dental care services. Unlike many other plans, there are usually no in-network dentist restrictions; employees simply choose the dentist they want. In addition, there are not many restrictions on treatments.

Additional implications for employees

Most direct reimbursement plans have a maximum limit, typically ranging from $1,000 to $1,500. Many plans will only pay a certain percentage of this maximum as well. For example, an employee might have to pay for 20% of their coverage for $1,500 of dental coverage. The percentage covered and the maximum limit are often dependent on what an employer has for the direct reimbursement plan.

Helpful links

The American Dental Association provides useful guidance in selecting a dental plan.

Delta Dental's website details the basics of dental coverage.

Federal Dental – Here, find a typical breakdown of coverage for different classes of services.

Wrapping up dental insurance plan options

Don't underestimate the value of adding dental insurance to your employee benefits package. Accessing dental insurance works to promote each employee's good dental health and support their overall health. While cost is a consideration, employee appreciation and decreasing work time lost due to dental issues offset this expense. Ultimately, adding dental insurance to your organization's benefits package can be a wise investment in your workforce's health and your company's future.

Visit TriNet for additional information on building a powerful employee benefits package to set your company up for success.