Different types of dental insurance plans for employees
Dental insurance is insurance that provides financial assistance to the insured for dental care. This can be either an individual or group plan. Although dental insurance was once considered a minor area, the importance of dental insurance is growing alarmingly. Dental insurance was once viewed as an employee perk. However, Human Resource Management Survey-1999 shows that 83% of small businesses offer dental insurance to their employees.
Everybody should have dental insurance. Dental insurance is cheaper than other forms of medical insurance. Dental insurance is less expensive than medical coverage, and actually costs less than 10%. Dental insurance is just like any other type of insurance. There are many plans you can choose from. Below are the main types of dental insurance that employees can choose from:
Direct reimbursement plan
This plan is based on the amount the company has set aside for this purpose. This plan reimburses employees for any dental treatment they have received. This plan is simple and does not require complex calculations. American Dental Association recommends this plan. Employers consider direct reimbursement plans the most costly. Because of the high cost, small businesses may find it difficult to get on board with this plan.
Indemnity Plans
These plans are more practical. This plan pays the premium to the insurance company, which then pays the dentists the amount for treatment. The insurance company uses UCR (usual. customary. and reasonable) to pay dentists. If the UCR rate used for dentists is lower than the dentist’s rate the patient must make up the difference. This plan provides insurance coverage for 100% preventive measures such as cleanings, 80% basic work such as a crown or cap, 50% for major procedures, and 100% for routine maintenance like dental hygiene.
Managed Care Plans
These plans are considered the most affordable. These plans are ideal for small businesses as they include cost control measures. The co-payments for each procedure vary and this plan requires patients to pay a set amount. Advanced procedures require a higher copayment, while preventive procedures can be done without copayment.
There are two types of managed care programs:
a. Program
The network of dentists that make up the preferred provider organization program is called the Preferred Provider Organization Program. This plan allows dentists to reduce their fees in order to be eligible for the plan. Employees can choose from the pool of dentists, but if they need to visit a dentist outside the pool, they will have to pay penalties.
b. Dental Health Maintenance Organization, (DHMO) Plan
This plan allows employees to choose the dentist they want from the pool. However, instead of reducing the fees, the dentists offer certain services free of charge. Even if the patient does not receive the payment, the dentist is paid a fixed fee per person.
