Don't Leave Money on the Table!


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Don't Leave Money on the Table!

  1. 1. Don’tLeave Moneyon the Table.Maximizing savings from your dental network. from Nationwide Employee Benefits. ®
  2. 2. For benefits advisers and employers We’re providing this brief article to give you a better understanding of managed dental plans and how they are working (or not working). Many employers are leaving money on the table by failing to make simple and subtle changes in their benefit plan. We hope to help change that.2 Nationwide Employee Benefits ®
  3. 3. Managed Dental Plans aremore numerous but underperformingManaged dental plans have grown to representthe vast majority of group dental plans thatare offered in the market today. Dental HealthMaintenance Organizations (DHMO) andPreferred Provider Organizations (PPO)dominate the plan types, with the latterbeing most frequently offered.PPO networks offer savings for obtainingservices from in-network dentists. Dentists offerdiscounts in exchange for employers directingemployees to them. In addition to the potentialfor savings, employers will sometimes createset plan designs to pay better benefits to helpmotivate in-network usage.Commercial Dental Benefits by Plan Type Direct Reimbursement Discount Dental Dental Indemnity DPPO DHMO2001 2002 2003 2004 2005 2006 2007 2008 2009 2010STATE OF THE DENTAL BENEFITS MARKET– 2012, National Association of Dental Plans Nationwide Employee Benefits ® 3
  4. 4. continued... Dental PPO networks are large, and getting larger. According to the American Dental Association, there are 181,709 professionally active dentists in the United States. • At the end of 2010, NADP found that most dentists are participating in dental plan provider networks. • DPPO panels are the most popular network types for provider participation. Dentists Participating in Provider Networks General Pediatric Oral Plan Type Total Endo Ortho Perio Prostho Dentistry Dentistry Surgery DHMO 27,214 17,440 1,514 2,512 1,313 46 1,144 2,176 DPPO 116,978 85,590 3,723 6,571 5,304 1,172 4,265 6,340 Discount 101,665 80,370 2,119 5,097 2,775 672 3,348 4,802 Networks are also being “spliced together” – providing even greater access. Even “managed” dental plans, however, are predominantly “passive” (same benefits in- network as out-of-network) rather than “active” (providing financial incentives to obtain services from in-network providers). Active plans Sample Plan Designs drive employee behavior, Passive Plan Active Plan so why aren’t Plan Feature OUT-OF- OUT-OF- IN-NETWORK IN-NETWORK more dental NETWORK NETWORK plans of the Deductible $50 $50 $50 $75 active plan design type? Coinsurance — 100% 100% 100% 100% Preventive Coinsurance — 80% 80% 80% 70% Basic Coinsurance — 50% 50% 50% 40% Major Annual $1,500 $1,500 $1,500 $1,000 Maximum STATE OF THE DENTAL BENEFITS MARKET– 2012, National Association of Dental Plans4 Nationwide Employee Benefits ®
  5. 5. Plans provide People are particular,financial preference purposeful and phobicPeople need food on a regular basis to survive, When it comes to dental care, people can be fartherefore grocery stores are important. They more scrutinizing, in choosing their dentist, thanneed to be strategically located, and provide even their medical care providers. Once they findthe products and services people need to stay a dentist they like, many are extremely resistantnourished. Before an individual eats, however, to switch. Employees’ reluctance to change canthey need a healthy mouth to properly turn lead to vocal opposition to active plan designs,their food into digestible nourishment. Aren’t if their dentist is not in the network. Such vocaldentists equally as important as grocery stores? opposition drives employer and benefits advisersThey provide services people need to maintain to primarily install passive plans.good oral health. Scrutiny in choosing and maintaining a dentistSuppose employees were provided a “discount” can be a result of dental phobias, which are allcard that rewarded them with up to 40% to 50% too real for many.savings, for shopping at specific “network” The Diagnostic and Statistical Manual ofgrocery stores. Would this be a great benefit, Mental Disorders (DSM-IV) describes dentaland would people tend to shop at those phobia as a “marked and persistent fear that isrelated network stores? excessive or unreasonable.” It also assumes thatWhy then, are people reluctant to go to network the person recognizes that the fear is excessivedentists, where that level of savings can be or unreasonable. Conclusion? The DSM-IVrealized? After all: criteria were obviously not decided upon by a • etwork dentists are credentialed. N representative group of dental phobics. Credentialing involves a screening of dentists for proper licensing and Whether the fear is “unreasonable”, “excessive”, professional operation. Network dentists or “irrational” is debatable… certainly not if you are re-credentialed typically every two end up in the hands of the wrong dentist. This, to four years. incidentally, is one of the reasons why people end • etwork dentists are located in most N up as dental phobics in the first place… high population areas. Typically, employers can offer most employees close proximity For more information to network dentists (at least two within on dental phobias, check out the 10 miles of where they live). resources at • are provided by network dentists C is reviewed by dental plans, for the least Ultimately, all dentists receive the same basic expensive alternate treatment. This means training, and the best dentists are the ones who employees can be assured they are getting the are “good with their hands.” There are even most cost-effective treatment possible. dentists that specialize in dealing with phobias— many are in dental networks. Nationwide Employee Benefits ® 5
  6. 6. Changing passive plans Perpetuate prosperity — to active plans take the money off the table Despite people’s dental peculiarities, only Dental service discounts are there for the network dentists offer great savings built into the taking — take advantage of them. Network plan. In order for the plan (and patients) to take dentists want your business, and are willing advantage of savings, they must be motivated to to discount their services for your participation. seek out network dentists. Establish an active plan design, even if just Active plan designs (better benefits with minor in-network vs. out-of-network for in-network services) can help drive differences – to start. Communicate with behavior, and therefore people to network employees all the advantages of network dentists. More people seeking services plan participation. in-network means better savings for the plan, Increase the in-network vs. out-of-network and employees — in general. This is good for all. plan differences over a multiple-year time period. In a passive plan, employees not choosing This gives reluctant employees time to find an network providers, effectively penalize their in-network dentist they like. A dental plan where employer, and fellow employees. How? a high percentage of employees (over 75%) are Employers reluctant to offer active plan design utilizing network dentists is the most due to dissatisfaction of a vocal few, forgo cost effective. considerable plan premium savings — as much Employers and employees are both being as 30%, particularly if the plan utilizes “maximum squeezed with the rising cost of benefits. But allowable charge” (MAC) as the out-of-network there are some simple changes to getting more payment basis — rather than usual, customary from your dental insurance plan. Maximize the and reasonable (UCR). If the employees value of your dental network and put that money contribute to the plan premium, that means on the table into your pocket! fellow employees are missing out on premium savings as well.6 Nationwide Employee Benefits ®
  7. 7. John D. KohanekCEBS, CLU, ChFC, RHUJohn is an insurance professional withextensive background in group employeebenefits, serving in a variety of productdevelopment and senior leadership positions.For the past 12 years, John has focusedon the dental insurance market, helpingcarriers, brokers and employers drivegreater value from their dental plans.John has developed expertise at all levelsof dental insurance products, from theCDT code level up to advanced product andnetwork strategies. He is an active memberof the National Association of Dental Plans(NADP) and has contributed to theirvolunteer leadership programs.John holds a B.A. in Business Administrationfrom the University of Nebraska as well asnumerous industry designations, includingCertified Employee Benefit Specialist,Chartered Life Underwriter, CharteredFinancial Consultant, and Registered HealthUnderwriter. Nationwide Employee Benefits ® 7
  8. 8. Dental plans from Nationwide Employee Benefits®. We offer a variety of competitive and flexible group dental insurance for employers of 10 or more employees. Our plan offerings include employer-paid, partial contribution and voluntary options. With our dental PPO plans, employees get one of the best networks in terms of discounts and over 215,000 provider access points nationally.Nationwide, Nationwide Employee Benefits, the Nationwide framemark, and On Your Side are service marks of Nationwide Mutual Insurance Company.© 2012 Nationwide Mutual Insurance Company. EBO-0157AO (12/12)