Consumer-driven health benefit designs are on the radio, in the news, even mentioned during the President’s State of the Union address this past January.
How does dental fit into this trend?
Dental benefits have traditionally been consumer-driven in nature. Consumers already are financially responsible for deductibles and coinsurance when they undergo expensive dental procedures.
Similar strategies can be used to create cost-saving designs that place more emphasis on network utilization, offer high-deductible dental benefits and promote core/buy-up options.
Who would be interested in these types of benefit designs? Any employer looking to control costs would benefit from a consumer-driven dental benefit design, whether the employer has a consumer-driven health care design in place or not.
Another option to consider is use of a limited-coverage flexible spending account. Used in combination with a consumer-driven dental benefit design, an FSA can help employees budget for dental expenses.
FSAs allow employees to set aside a portion of their salary before federal, state and Social Security taxes to pay for qualified health and dependent care expenses. However, Internal Revenue Service regulations prohibit employers from offering a traditional full-service FSA in combination with an HSA-compatible high-deductible health plan and an HSA.
A new type of limited-coverage program can provide pre-tax funds for dental, preventive medical and vision expenses.
Employees must decide whether to pay expenses from their own pockets or by withdrawing funds from their HSAs. To conserve HSA dollars for medical needs, the limited-coverage FSA can provide tax-favored reimbursement for out-of-pocket dental costs.
An employer using a high-deductible dental benefit design is the ideal candidate for a limited-coverage FSA.
Employees can contribute the amount of the dental deductible into the FSA pre-tax, and health care expenses not paid through the FSA can be deducted if they exceed 7.5% of their adjusted gross income.
Consumer-driven health care benefit designs teach people to be smarter consumers–in control of their health care dollars and responsible for the decisions they make. Good consumer-driven designs provide the tools and resources employees need to make the best decisions concerning their dental health. Understanding the link between oral health and overall health is also key because maintaining good oral health can help combat overall health concerns such as diabetes, complications of pregnancy, oral cancer, respiratory ailments and heart disease.
In addition, access to education and resources help employees understand the costs associated with dental insurance, which traditionally are shielded from the employee through their benefit design. Offering employees access to procedure costs, treatments plans for specific oral ailments, lists of network dentists and dentists who can answer general questions can empower employees to make the right decisions for their wallets.
Offering a dental provider network in conjunction with a consumer-driven dental plan can help do even more to hold down the employer’s share of premiums, the employees’ share of premiums and employees’ out-of-pocket expenses.
The best consumer-driven carriers also offer health and wellness solutions that go beyond traditional insurance, such as discounts on dental care products or access to vision insurance with dental coverage. Some also offer convenient access to comprehensive dental information through the Web.