One of the largest insurers in the world is returning to the group dental insurance market.
Prudential Financial Inc., Newark, N.J., is filing for permission to sell group dental insurance in all 50 states and in the District of Columbia.
Prudential says it will begin quoting preferred provider and indemnity plans in about 10 states by June 30, and hopes to be quoting in most other states by year-end.
Prudential will start by marketing dental coverage through a team of 70 small-group representatives to brokers that serve employers with 25 to 1,000 employees, according to Andrew Mako, a senior vice president in Prudential’s group insurance business.
Later, 71 account executives, regional sales managers, account managers and national sales directors who handle midsize and large groups will start selling Prudential dental coverage to larger employers, Mako says.
“We intend to make it a big part of our portfolio,” Mako says. “We view it as a lead product.”
Prudential was once a major player in the group health and group dental markets.
When it sold its group health business to Aetna Inc., Hartford, in 1999, it also sold its dental business.
But Prudential found when it talked to employers that “a lot of people still thought we were in the dental business,” Mako says.
The reps who sell Prudential life and disability products asked the company to offer a dental plan, because “they believe it gives them a leg up with many brokers,” Mako says.
Prudential is seeing the dental market showing solid single-digit growth, and it is hoping it may make more room to grow by coming up with new combinations of employer-paid and employee-paid benefits, such as programs that combine employer-paid preventive care benefits with employee-paid benefits for other types of dental services, Mako says.
Selling hybrid products in the disability market can be risky, because claims there can be costly and can last for decades. But an insurer can address any anti-selection problems in the hybrid dental program market by repricing products in just a year or two, Mako says.
Prudential will be using Group Dental Services Inc., a unit of Coventry Health Care Inc., Rockville, Md., to provide the dental network used in the new plans. The Group Dental network has contracts with about 130,000 dental offices.
Prudential selected Group Dental through a request-for-proposal process. “There were quite a few people to choose from,” Mako says.
One factor that could shake up the dental insurance market and other ancillary benefits markets is the new health system change legislation President Obama has signed into law. (See sidebar.)
It is not yet clear how the Patient Protection and Affordable Care Act and its companion, the Health Care and Education Reconciliation Act, will affect dental insurers, Mako says.
“A lot of the details were left to the regulators to put in place,” Mako stated.
Although Mako is not expecting PPACA and HCERA to have a significant direct effect on Prudential’s new dental business in the next few years, he says the new acts could affect some of the big health insurers in the dental market.
“What will the health insurance companies do with their dental businesses?” Mako asks.