Question: I own a small business and have been growing my staff. I’d like to offer dental insurance to my employees. What should I consider when selecting a plan?
The Agent Says: When selecting a dental insurance plan for your small business, there are a few important questions to ask yourself and topics to explore. First, you should decide if you want to fully fund a dental program (employer-sponsored) where you pay 100 percent of the employee premium. If not, you will want to look at a voluntary dental program. Voluntary dental plans will be more expensive than an employer-sponsored plan and this is because of adverse selection—only employees who need current dental work done or frequent their dental office will apply, and all the employees who don’t go to the dentist often or won’t be heavy utilizers of the coverage will waive. To counter adverse selection, carriers increase the plan rates as group participation percentage falls.
We have four tier levels, with 75 percent+ offering the best rates. The other tiers are 0-24 percent, 25-49 percent, and 50-74 percent. Groups of five or more eligible lives can offer multiple plan design options to their employees, as long as at least one employee is enrolled in each option. This is a good way to increase enrollment on a voluntary plan. I also see some employers fully sponsoring a low-cost preventive plan for their employees and allowing the employees to “buy up” to a employers receive the best rates for their employees for all plan designs quoted.
It is also important to remember that the rules that apply to medical insurance do not apply to ancillary coverage like dental insurance. One of the most relevant rules that does not apply to dental insurance is the ability to offer “carve out” plans. A carve out is taking a subgroup of employees based on occupation, salary, or another factor decided by the employer and offering different coverage options only to this class of employees. By taking a subgroup or carve-out group of employees, the employer can reach higher participation levels because the employees who are not part of the subgroup are not considered eligible for the coverage.
There are few rules and regulations that apply to dental insurance plans, and our group dental product allows for practically limitless possibilities as long as the group has at least five eligible lives. With the help of an agent or representative, you should be able to come up with a few plan design options that cater directly to your employees’ dental insurance needs.
Ryan Rosenberg, Senior Sales Consultant