Dental Insurance

Dental insurance plans today are beginning to look more and more like health insurance plans of the late 1980's and early 1990's. This is because companies continue to look for the most efficient ways of supplying medical and dental insurance to employees. For employees that means more dental maintenance organizations (DMO) and employee's paying a greater share of the insurance costs.

Why Dental Insurance?

In this publication we're going to discuss the basics of dental insurance, how these plans have changed recently, and what you can expect from a good dental plan. But let's start off with a quick discussion of the value of dental health care insurance.

Additional Resources

Dental insurance works in the same way health insurance does - it protects individuals against the high cost of dental procedures. It is designed to pay for the expenses associated with dental care such as services from a dentist and even hospital care.

Many employers offer dental insurance along with health insurance and that's one of the reasons that the same individuals that are participating in health care plans are also receiving dental insurance. This protects employees from unexpected dental costs and the possibility of incurring a financial hardship.

Benefits of Dental Insurance

According to the American Dental Association, over half of the population in the United States is not covered by a dental insurance plan. And most of those families that do have dental insurance have it because it's part of the health care benefits provided by their employers.

And perhaps the biggest benefit of owning dental insurance is preventative care. Annual or semi-annual check ups can frequently detect damage to teeth before they require more complex procedures such as root canals and tooth extractions - which often require costly cosmetic repairs such as caps, bridges or dentures.

Dental Insurance and DMOs

In recent years, companies started to migrate to dental insurance plans like dental maintenance organizations, or DMOs, because the plans allow them to control the cost of dental services more closely. For example, one dentist might charge a patient $75 for a routine dental cleaning while another might charge $125. This discrepancy in charges causes many companies to seek the help of dental networks.

Many large companies are self insured - they pay to have an insurance company to administer their dental plans, but the company itself pays the actual costs of dental services used by their employees. In the example above, perhaps the dentist charging $125 for the cleaning is providing good value, but the company is faced with a decision here. Is the dentist charging $75 providing adequate dental services?

If the answer to this question is yes, then perhaps a charge of $75 is appropriate for a dental cleaning. Negotiating a fee structure within a network of dentists provides benefits to both the company and the DMO. The company can control costs and the dentist can get a fair fee in exchange for a large pool of employees seeking their services. In addition, since the company has a greater ability to control costs in a DMO, the benefits included in the plan - or dental coverage - is usually more generous.

Group Dental Insurance Plans

Group dental insurance plans are sometimes offered to employees when a company-funded dental plan is not offered. Group insurance plans are usually negotiated with an insurance provider on behalf of employees. Since the transactions involved with a managing larger number of participants is more efficient to administer, the savings can be passed along to employees in the form of lower rates compared to an individual dental plan.

Individual Dental Insurance Plans

If your company does not provide a dental plan, individual dental plans are offered by a large number of reputable insurance companies. You can find many of these companies simply by searching over the Internet or even by contacting the health insurance company that is already providing your medical care. Make sure you shop around because identical coverage can vary significantly in cost.

Insurance Limits, Coinsurance and Deductibles

Even those employees covered under their employer's dental plan may be faced with insurance limits, coinsurance and deductibles. Dental insurance limits are usually set at the family level or by individual family members. For example, your plan might state that the family has an insurance limit of $3,000 or individual limits are set at $1,000.

Coinsurance is the term used to describe when payment for dental services is shared between the employee and the employer. Some dental plans might pay 100% of the fees for the first $500 of dental expenses submitted each year, then pay 80% up to a maximum of $3,000 in expenses. This means that the employer will pay 80% of the fees from $500 through $3,000 and the employer is responsible for paying the remaining share of these fees.

Finally, if a dental plan includes an insurance deductible, then that means the employee is responsible for payment of this fee before the employer begins sharing expenses. (Quite frankly, all these payment-sharing features are really just ways to mask the employee's real out-of-pocket share of these expenses.) For example, if a plan states that they have a $75 deductible that means the employee will pay the first $75 of dental fees each year.

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