Managed dental plans, such as DHMOs and PPOs, have become the most common types of group dental plans offered. While dental PPO networks are large and provide access to many dentists, most plans are "passive" rather than "active," meaning they do not provide financial incentives to use in-network dentists. As a result, employers may be missing out on significant savings potential from discounts offered by in-network dentists. Converting dental plans to an active design, with better benefits for in-network care, could help motivate employees to choose in-network dentists and allow employers and employees to realize more savings from the dental network.

1. Don’t
Leave Money
on the Table.
Maximizing savings from your dental network.
from
Nationwide
Employee Benefits.
®

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. Managed Dental Plans are
more numerous but underperforming
Managed dental plans have grown to represent
the vast majority of group dental plans that
are offered in the market today. Dental Health
Maintenance Organizations (DHMO) and
Preferred Provider Organizations (PPO)
dominate the plan types, with the latter
being most frequently offered.
PPO networks offer savings for obtaining
services from in-network dentists. Dentists offer
discounts in exchange for employers directing
employees to them. In addition to the potential
for savings, employers will sometimes create
set plan designs to pay better benefits to help
motivate in-network usage.
Commercial Dental Benefits by Plan Type
Direct Reimbursement
Discount Dental
Dental Indemnity
DPPO
DHMO
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
STATE OF THE DENTAL BENEFITS MARKET– 2012, National Association of Dental Plans
Nationwide Employee Benefits ®
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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 Plans
4 Nationwide Employee Benefits ®

5. Plans provide People are particular,
financial preference purposeful and phobic
People need food on a regular basis to survive, When it comes to dental care, people can be far
therefore grocery stores are important. They more scrutinizing, in choosing their dentist, than
need to be strategically located, and provide even their medical care providers. Once they find
the products and services people need to stay a dentist they like, many are extremely resistant
nourished. Before an individual eats, however, to switch. Employees’ reluctance to change can
they 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 vocal
dentists equally as important as grocery stores? opposition drives employer and benefits advisers
They provide services people need to maintain to primarily install passive plans.
good oral health. Scrutiny in choosing and maintaining a dentist
Suppose employees were provided a “discount” can be a result of dental phobias, which are all
card that rewarded them with up to 40% to 50% too real for many.
savings, for shopping at specific “network” The Diagnostic and Statistical Manual of
grocery stores. Would this be a great benefit, Mental Disorders (DSM-IV) describes dental
and would people tend to shop at those phobia as a “marked and persistent fear that is
related network stores? excessive or unreasonable.” It also assumes that
Why then, are people reluctant to go to network the person recognizes that the fear is excessive
dentists, where that level of savings can be or unreasonable. Conclusion? The DSM-IV
realized? 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 www.DentalFearCentral.org
• 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 ®
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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. John D. Kohanek
CEBS, CLU, ChFC, RHU
John is an insurance professional with
extensive background in group employee
benefits, serving in a variety of product
development and senior leadership positions.
For the past 12 years, John has focused
on the dental insurance market, helping
carriers, brokers and employers drive
greater value from their dental plans.
John has developed expertise at all levels
of dental insurance products, from the
CDT code level up to advanced product and
network strategies. He is an active member
of the National Association of Dental Plans
(NADP) and has contributed to their
volunteer leadership programs.
John holds a B.A. in Business Administration
from the University of Nebraska as well as
numerous industry designations, including
Certified Employee Benefit Specialist,
Chartered Life Underwriter, Chartered
Financial Consultant, and Registered Health
Underwriter.
Nationwide Employee Benefits ®
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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.
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© 2012 Nationwide Mutual Insurance Company. EBO-0157AO (12/12)