Direct Dental: The Dental Benefits Plan for Smart Companies
Facts on Dental Care
● Each Person averages 1.1 office visits per year
● The average dental expense per person is $250 for 2005
● The need for dental care is highly predictable
● Dental care is easily manageable
● People typically do not over-utilize dental benefits
Direct Dental is an innovative approach to self-funding employee
dental benefits. It is strongly supported by the American Dental Association as
a cost-effective way to provide a dental plan for employees that gives them the
freedom to choose their dentists.
How it works
One of the most attractive features of a Direct Dental plan is its
simplicity of operation.
Benefits are stated as a maximum dollar limit per year per eligible
individual, or a percentage thereof. Reimbursement is based on dollar
expenditures rather than on treatment received. Unlike conventional plans, there
are typically no exclusions and few, if any, limitations on specific treatments
and participants may use the dentist of their choice. No networks, PPO's, etc.
Unlike medical costs, dental costs are low enough for the employees to
participate in the cost of treatment, and to make sure that the work is
satisfactory. In other words, with Direct Dental, the plan sponsor
expects the employees to be responsible for the best use of the benefit dollars
available. Additionally, employees are involved in the cost containment process
through cost-sharing provisions such as annual maximums and co-payments.
Flexibility
The details of a Direct Dental plan may vary widely depending on the
level of benefits the employer wishes to provide. Some of the options to be
considered in designing the plan include:
employees only or employees and dependents
co-payment provisions
annual benefit maximums (individual or family)
immediate benefits or a waiting period for eligibility
Available to small groups:
Both large and small employers have instituted Direct Dental programs to
assist the employees in meeting the costs of their dental care. Companies with 2
to 16,000 employees have enjoyed cost savings with a Direct Dental plan. Even a small
employer can design a plan to meet the needs of its employees while, at the
same time, satisfying the company's financial and administrative concerns.
Cost considerations:
A Direct Dental plan gives the employer immediate control of the
maximum level of benefits offered. By including cost-sharing measures in the
plan design, the employer is protected against wide fluctuations in benefit
costs. In a Direct Dental plan, the employer only pays for dental costs as they
are incurred.
Unlike conventional insured programs where the employer's premium rate
frequently is determined by the pooled experience of many groups, the
employer's expense for a Direct Dental program is based only on its own
employees' experience. In addition, employer funds that would
be kept by an insurance company are now left to the employer.
Perhaps the most clearly discernible savings to the employer are in the
administrative costs of a Direct Dental plan. The simplification of claim
forms and other extraneous paperwork reduces much of the transactional cost of
administration. Further, since a Direct Dental program is not considered
"insurance," there is no premium tax liability.
One of the most important features of a Direct Dental plan is the
employees' freedom to choose their own dentists without restrictions. Because
employees have this freedom to choose their own dentists and their own dental
treatment, the employer's potential liability exposure can be greatly reduced.
This information was provided as an overview of the Direct Dental
approach to providing dental care benefits. Ultimately, the decision to
implement a Direct Dental program, and the specific details of your plan, is yours.
Click on the links below to see some sample plans and use our simple plan
calculator to see what your potential savings could be by switching to a Direct
Dental Plan.
CALCULATE YOUR SAVINGS
(You must have Adobe Reader installed on your system to view this page. Click
this link for a free download of Adobe Reader)
Mike Edwards Benefit Group Inc Home
800.463.8020