In today's competitive labor market, dental insurance can be a nice fringe benefit to offer your employees.
(article continues below)
Small business owners often feel like they are at a disadvantage because they can't absorb dental insurance premiums as easily as larger companies. But you might be surprised to learn that you have a lot of options – and some may be more affordable than you think.
Like health insurance, dental insurance improves the overall health of your labor force. By making it easier for your employees to access preventative measures such as regular cleanings and periodic x-rays, you can reduce the amount of time lost for extensive dental procedures. Less time lost translates into greater efficiency in the workplace and a healthier bottom line for your company.
Most dental insurance policies come in at less than 10% of the cost of general medical insurance. However, you can control the cost of dental insurance even further by carefully researching the type of plan you select. Here are your options, ranked from the most expensive to the most affordable.
A direct reimbursement plan is technically only an insurance plan from the employee's perspective. Rather than relying on a third-party insurer, the employer offers in-house dental coverage for employees by paying for dental expenses from a cash reserve the employer sets aside exclusively for this purpose. Dentists love these kinds of plans because they don't restrict the amount they can charge for services. But they are also the most costly for employers.
Indemnity plans are traditional insurance plans in which a third-party insurer collects premium in exchange for dental coverage. As an employer, it's much more convenient than a direct reimbursement plan because you can accurately budget for it based on the amount of your annual premiums. Employees, on the other hand, can be left holding the bag for dental costs that exceed the amount the insurance will pay. Co-pays and deductibles are standard features as well, so the out-of-pocket costs for your workers can quickly add up.
Managed Care Plans
Managed care plans are possibly the fairest plans because no one is completely satisfied. Like an indemnity plan, a third-party insurer provides employee coverage for dental care. But the difference is that managed care plans are subject to certain cost-cutting measures that restrict both patients and dental care providers. Employees are forced to select treatment from a list of providers distributed by the insurer. In return for being included in the plan, providers' fees are determined in advance by the insurer. Although they are usually still required to come up with a copayment, the big benefit for patients is that they are no longer required to cover service fees that exceed insurer limits. Business owners generally favor these plans because they are the least expensive option.
The actual costs of dental insurance plans vary, but can run from $800 - $1,500 a month per employee, with employers picking up between 25% - 50% of monthly premiums.