Many people rely on dental insurance to offset the costs of dental care and receive preventive care. Small businesses don't need to provide employees with dental benefits but doing so may help them to obtain or retain workers. This article will help you understand how to find the right dental coverage for your business, plus the different plan options available to small business owners and employees.
How Dental Coverage Works
Dental insurance works similarly to health insurance as it helps to cover the costs associated with professional health services. Enrollees pay a premium each month to the insurance company, and as an employer, you can pay a percentage of your employee's premium each month to help with the cost. Dental insurance also sometimes puts a monetary limit (known as a maximum) on the benefits you can receive each year.
Most dental insurance plans have a 100-80-50 coverage structure. This means that the insurer will 100% cover preventive services, such as exams, X-rays, and cleanings. It's a smart move because the more people regularly maintain their oral health, the less money they'll have to spend on major services. Basic procedures like having a cavity filled are covered at 80%. Major services like crowns and root canals are covered at 50%.
As for orthodontics coverage, not many dental plans include benefits for this type of dental work since it's often seen as cosmetic care. Some dental insurance companies offer orthodontic coverage as an add-on to their dental plans.
Types of Dental Insurance Plans
An insurance company usually has more than one type of dental plan to offer its customers. You choose a dental plan like you would a health plan. Compare the plan's benefits against your health care needs and budget to find the one that best fits your situation. Here are the four most commonly offered dental insurance plans.
Dental Preferred Provider Organization (DPPO)
A dental preferred provider organization (DPPO) is also often known as a dental PPO. It's one of the most common types of dental plans currently on the market. If you have a DPPO, you'll want to use dentists within the organization's network as in-network dentists have negotiated their fee structure with the insurance provider. You're still permitted to see an out-of-network provider, but your out-of-pocket costs will be higher.
PPO plans have wider networks than other coverage options so it can be easier to find a dentist near you that you like. You also don't need to obtain a referral to see an in-network dental specialist. Premiums are higher, but with that cost comes greater flexibility. Most PPOs also require you to pay a copay at the time of service and meet a deductible before receiving more coverage. These plans tend to have a maximum amount they'll pay for your dental care, too.
Dental Health Maintenance Organization (DHMO)
A dental health maintenance organization (DHMO) is the least expensive dental insurance option. A DHMO plan typically has the lowest premiums, no deductibles, and no annual maximum spending limit for dental services. It's a great option for those who often need extensive dental care. The main problem some have with this type of plan is its restrictions.
A dental HMO operates much like an HMO health insurance plan. For example, you must stay within your HMO dental network to receive full or partial coverage of dental care costs. The insurance company provides a list of pre-approved primary dentists in your area from which you must choose. A DHMO network is also much smaller than a DPPO network. Further, if you need to see a specialist, you can't make the appointment to receive care; your primary dentist must send a referral to the dental specialist for you.
Indemnity Plan (Fee-for-Service)
An indemnity plan, also called a fee-for-service plan, is the least common type of dental insurance and typically the most expensive. It comes with a lot of flexibility as to which dentists you can see because there's no established network; however, you'll also have to deal with the hassle of filing paperwork with the insurance company.
When you have an indemnity plan, you pay the dentist the full amount due at the time of service. Then, you'll need to submit a claim to the insurer and wait for approval. If the claim is approved, the insurance company reimburses you for the portion it's responsible to cover. The amount insurers will pay for different procedures is usually the amount the American Dental Association (ADA) has set.
Group Dental Savings Plan
A group dental savings plan is a non-insurance type of dental coverage that's a more affordable option for small businesses. Members of a group dental savings plan pay a low annual fee to access a network of dental professionals. These dentists have agreed to accept a reduced fee from patients who are members of the group dental plan.
This type of plan is also very easy to manage as there aren't any annual limits to monitor or claims to file with an insurance company. It's a great way for people to use group buying power to receive discounts on dental work.
Small Business Dental Insurance FAQs
Do Small Business Owners Have to Offer Dental Insurance to Employees?
Small business owners aren't required to offer dental insurance to employees. According to the Affordable Care Act (ACA), employers are only required to offer access to health insurance once the company reaches 50 employees. Even though dental coverage isn't mandatory, it does add more appeal to a company's benefits package.
What Is the Small Business Health Options Program?
The ACA established a new program for small employers who have less than 50 full-time employees. It's called the Small Business Health Options Program (SHOP). SHOP enables small businesses to provide health and dental coverage to their workers. It's also how employers gain eligibility for the Small Business Health Care Tax Credit, which helps to decrease premium costs.
How Do I Find Dental Coverage Through the SHOP?
The ACA Marketplace is where you can access dental plans with high or low coverage options. You can purchase a medical plan that includes dental coverage or choose a stand-alone dental plan. Contact a SHOP-registered agent or broker to learn more about your options. They'll also be able to explain enrollment periods, exclusions, and any required waiting periods.
How Do I Find the Best Dental Insurance?
You'll need to shop around online to find the best dental plan for your small business. Here are some things you should look for when comparing different plans:
- Affordable out-of-pocket costs
- Few exclusions
- Flexible plan options
- Large provider network
- Low premiums
- Minimal waiting periods
Some online resources also list the best dental insurance companies so you can check out their rankings, too. These lists are an easy way to compare many companies in one place and get a quick overview of the pros and cons of each insurer and their dental plans. Companies like Cigna, Humana, and Delta Dental often come out on top as dental insurers.
How Much Does Dental Insurance Cost Employers?
Dental insurance pricing varies widely depending on the type of coverage you choose. The amount you pay per employee also depends on the percentage of the premium you're willing or able to cover. You might find it helpful to talk to an insurance agent and an accountant to determine your options and what level of pricing you can afford.
How Much Does Dental Insurance Cost Employees?
When an employee enrolls in a dental plan through their employer, they typically pay a monthly premium to receive dental care. Some plans also require employees to make a copayment at the time of service. Not all dental procedures are covered 100% by insurance companies, so there will be some out-of-pocket costs after insurance has paid their portion.
How much employees pay for dental care will vary each year depending on their (and their dependents', if applicable) oral health care needs. The average American pays about $360 per year for dental coverage.
Is Paying for Dental Insurance Worth It?
The cost-efficiency of paying for a dental insurance plan varies depending on the plan's pricing, service coverage, and individual circumstances. For example, a single person with a generally healthy dental history won't pay as much as an employee paying for insurance to cover themselves, their spouse, and their children. Choosing a dental insurance plan with flexible options enables your employees to find the right dental coverage for their needs.
Skynova Helps You Manage Your Small Business Finances and More
If you need help managing accounts, invoices, payments, and more, check out Skynova's accounting software. Skynova products were designed specifically to help small business owners manage their financial records all in one place online. We also provide many free business templates to simplify and streamline your paperwork. Learn more about Skynova's small business products today.
Notice to the Reader
The content within this article is meant to be used as general guidelines and may not apply to your specific situation. Always consult with an insurance professional to ensure that you're meeting all required insurance obligations as set forth by law.