The most common word people use to describe dental insurance is “expensive.” Not far down the list is “boring.” If we’re doing our job right at Beam®, it won’t be long before you start thinking of dental benefits as something entirely different: affordable.
To help you make sound decisions on dental benefits, let’s open up the black box of dental insurance underwriting so you can better understand how groups are priced. Below are a few factors that can impact a group’s premium as you look at dental plans. However, remember that the most important consideration should be the value of any given benefit to you and your team.
Let’s start with a simple one: location. If you think about it, dental insurance ultimately pays dentists for procedures that they perform on patients. Naturally, not every dentist charges the same, and a big factor of their rates is their location. Think rent for office space in the middle of Iowa is the same as in Manhattan? Not quite.
So what happens? Dentists charge more to cover their expenses and insurance has to pay them more, so the carrier, in turn, charges more for a group. It’s not complicated, but based on your company’s location, your rates could be significantly higher or lower than a similar group in a different location.
While you may not realize it, workforce makeup is a big factor in determining a dental insurance plan rate. Is the group made up of a large number of young, generally healthy employees? Are there a lot of pre-teen dependents primed for braces? Does the group have a high percentage of older employees who are likely to need more extensive dental work in the coming years? Ultimately, there are aged-based factors that play into dental plan pricing, and workforce demographics are the objective proxy for those factors.
This is an interesting one, as it may not be intuitive for dental insurance. Just as other industries (e.g., construction) pay more in workers’ comp insurance, some industries will pay more for dental insurance. In the entertainment industry, it’s not unreasonable to expect entertainers to have "perfect" smiles. As a result, they require more dental services and pay higher premiums. What about professional athletes? They’re at much higher risk for tooth and jaw damage and, as a result, pay more for dental insurance. Desk workers at a startup or small business, however, can expect to pay a bit less than average.
Specific premiums also depend on a plan’s coverage levels. Coverage levels are the percentage of the cost of care paid by the insurance company. Carriers may have different tiers of plans with varying levels of coverage, ranging from basic to comprehensive. For instance, Beam® has four tiers of SmartPremiumTM plans to meet a range of needs of our clients. Naturally, a higher-tier plan with any carrier will cost more than a basic preventative plan. Ultimately, most carriers will probably offer a plan that fits within your budget, especially when you consider that you don’t have to contribute to 100% of the costs. Perhaps you just pay for employees, not dependents, or you could even offer a completely voluntary plan, which is still valued by employees because of the most beneficial rates versus individual plans.
Beyond the cost and coverage of the insurance itself, I suggest you include two other considerations in your decision:
- What is the cost of not having group dental insurance?
- What is the true value of a dental insurance plan?
The first point comes down to this: employees will have to pay more for services and, on average, see the dentist less frequently for preventative care if they don’t have a dental insurance plan. This not only has quality of life and worker productivity ramifications, but it can also affect major medical costs.
As to the value of a plan, this is ultimately how I encourage you to make your decision. Yes, budget comes into play and you want to stay within that, but you don’t necessarily want the “cheapest” dental insurance plan. As you’re evaluating plans and pricing, ask yourself a few questions like:
- Will this plan cover the needs of employees?
- Does this carrier offer additional technology or services (e.g., digital enrollment, employee communications) that make managing the plan easier?
- Are there any other tangible benefits that come with this plan?
At Beam®, we agree that cost is important, and I hope this post helps you understand a bit more about what goes into pricing a plan. But thinking beyond pricing can ensure you’re receiving great value for your team. Dental insurance is a very real cost, and you want to make sure you’re finding the best dental insurance plan for your team.