Dental
insurance consistently ranks as the #1 benefit asked for by employees
after the health insurance plan. The
problem today is that many employers can't afford to absorb the cost
of adding a dental program or continuing their current dental program.
Voluntary dental programs are
one solution. These
plans allow employees and their families to purchase dental coverage
through the convenience of payroll deduction. In many states,
there are no viable personal dental plans so the voluntary programs
allow employees to receive quality dental coverage at affordable group rates.
Direct
Reimbursement is another solution. It was created by the American Dental
Association (ADA). This self-funded plan offers substantial savings over
fully insured
plans. The reason you might not have heard
about this from other brokers is that it does not pay commissions to
the broker. We know what's good for the client is
good for BenefitsLab so we're quite happy to discuss it with you.
One large dental
insurer tells us their actuaries use a 65% loss ratio for
calculating premiums, which means 65% of the premium is allocated for claims.
The other 35% goes for administrative expenses (commissions, claims
administration, profits).
The
ADA tells us that "almost 35% of people with dental plans do not receive
dental care in a given year. Of those who do receive dental
care, most incur dental care of just less than $300 annually."
Some companies
using Direct Reimbursement have been experiencing savings of 50% or
more.
|
