Dental floss can get into crevices between teeth where toothbrush heads cannot enter. Some insurers are trying to cope with the recession by making their dental plans more like flexible, targeted dental floss, and less like a big, rigid toothbrush head.
“The cost of health care has been increasing for a number of years” and that has squeezed sellers of dental plans and other ancillary benefits products, according to Christopher Swanker, vice president of group dental and vision at Guardian Life Insurance Company of America, New York.
Today, he says, “the economy around us is certainly driving an increase in the number of plan designs.”
Some employers are shifting the full cost of dental coverage to employees, or changing plan design to reduce premiums.
Other employers may want to keep the exact same deluxe plan–even though layoffs have reduced the group size to 9, from 99; mirror a health savings account program by adopting a plan with a high deductible and a high maximum; or even improve the benefits to take the sting out of the suspension of the 401(k) plan match.
A unit of MetLife Inc., New York, recently began rolling out the Benefits Bundle for Small Business. Employers with 10 to 99 employees can choose 2 of 3 core benefits–life insurance, long-term disability insurance or dental insurance–then let employees buy added coverage with no minimum participation requirements.
Humana Inc., Louisville, Ky., has set up an optional program that offers dental renewal rate discounts of up to 3% as an incentive to reward group plan members for participating in wellness and condition management programs.
Insurers also are openly courting workers who are losing group dental benefits. Humana, for example, says it has started selling individual dental and vision products online, under the HumanaOne label. “With fewer employers offering group benefits, such as dental and vision, more people are turning to individual plans like HumanaOne,” the company says, assuring consumers that individual dental products work just like group dental products.
Guardian has introduced a program that permits employers to set up dental plans with a wide range of deductibles. The insureds with the highest deductibles can have an annual maximum of $3,000 to $5,000.
In addition to interest in a variety of deductible and annual maximum options, Swanker sees strong employer interest in holding down costs by redrawing the lines between preventive, basic and major services.
Many plans pay all or most of the cost of preventive services, a somewhat lower percentage of the cost of basic services, and a still lower percentage of the cost of major services.
That means moving a service such as crown restoration to the major services category, from the basic services category, can reduce claim costs, Swanker says.
One key to flexibility is an interest in being flexible, and another is having the right kinds of information technology systems and personnel.
“There’s a lot involved in developing the logic to make sure the claims system works,” Swanker says.
Knowing when requests cannot be accommodated, and how to come up with alternatives that may help a client meet the same objectives, is also important, he adds.
Plans Feel The Bite
Some months ago, as the recession was deepening, most employers told pollsters that they would try to maintain their benefits programs. Since then, the difficulty of doing business in a recession has hit home.
Health insurers such as WellPoint Inc., Indianapolis, and UnitedHealth Group Inc., Minnetonka, Minn., warned in their first-quarter financial reports that the recession has started to affect commercial medical plan enrollment. The same trends are affecting dental insurers.
WellPoint, for example, says its dental enrollment fell 9% in the first quarter, to 4.3 million, “primarily due to the loss of several large customers and sales continuing to lag due to a slowing economy.”
BNL Financial Corp., Austin, Texas, the parent of Brokers National Life Assurance Company, says its premium revenue fell 5.4% in the first quarter. That drop “was primarily due to a 4.8% decrease in group dental premium as a result of the impact of the recession on voluntary employee benefits,” BNL says.