Costs and Coverage of Dental Benefits

Costs and Coverage of Dental Benefits
November 2005

This Culpepper Benefits Survey focused on dental benefits offered to U.S. employees. Ninety-five percent of companies offer U.S. employees enrollment in at least one of the dental benefit plans listed in Table 1 below.

Table 1: Types of Dental Plans Offered
Type of Dental Plan	% of Companies Offering Dental Plan to Employees
Preferred Provider Organization (PPO) - A plan in which employees can reduce their annual deductible, and the portion of the bill they pay, by selecting from a specific network of participating dentists.	77%
Indemnity Dental - A traditional fee-for-service plan in which employees pay an annual deductible before receiving any reimbursement, and then pay a percentage of their dental bills until a specific out-of-pocket cost is incurred.	23%
Dental Health Maintenance Organization (DHMO) - A plan in which there is no deductible or co-insurance, and employees must select their providers from a list of participating dentists and/or facilities. Also known as "pre-paid" plan.	13%
Dental Discount Plan (DDP) - A plan in which employees receive discounted dental care, by selecting from a specific network of participating dentists. Also known as "reduced-fee" plan.	2%
Other Type - Plans other than those described above.	7%
*Note: Percentages add up to more than 100% since companies may offer more than one type of plan to employees.

Timing of Employee Eligibility for Dental Plans
Forty-two percent of companies allow employees to enroll in the dental plan on the first day of employment, with another 39 percent allowing them to do so on the first day of the month following the first day of employment (Table 2).

Table 2: When Employee is Eligible to Enroll in Dental Plan
Timing	Percent of Companies
First day of employment	42%
First day of the month following first day of employment	39%
After 30 days of employment	14%
First day of the month following 30 days of employment	4%
After 90 days of employment	1%

Expenses Covered by Dental Plans
All plans cover either some or all of the expenses associated with preventive dental care (Table 3). In addition to preventive dental care, almost all plans cover dental x-ray expenses. Although teeth whitening/bleaching is a popular dental treatment, few plans cover the expense.

Table 3: Expenses Covered by Dental Plan
Type of Expense	Percent of Plans Covering
Preventive Dental Care	100%
Dental X-Rays	99%
Dental/Oral Surgery	86%
Prosthodontics	82%
TMJ Treatment	17%
Teeth Whitening/Bleaching	2%

Monthly Premiums for Dental Plans
Table 4 below displays the data on total monthly premiums for dental plans. Dental plans covering the employee average $33 per month, and those covering families average $102 per month.

Table 4: Cost of Monthly Dental Premiums

Level of Coverage

Total Monthly Premium Cost ($USD)

Average

Percentiles

10th 25th 50th 75th 90th

Employee

$33.29

$24.44

$27.48

$33.17

$38.45

$43.48

Employee + Child

$74.04

$50.59

$60.33

$72.20

$81.52

$104.04

Employee + Spouse

$71.87

$50.19

$56.95

$68.92

$83.34

$100.16

Family

$102.01

$74.00

$84.70

$102.62

$119.00

$129.75

Just over a quarter of the companies pay the entire monthly premium for employee-only coverage (Table 5). This percentage drops as coverage expands to include children, spouses, and families. The median percentage of the monthly premium companies pay, ranges from 72 percent for family coverage up to 77 percent for employee-only coverage.

Table 5: Percent of Monthly Dental Premiums Paid by Company

Level of Coverage

Percent of Total Monthly Premium Paid by Company

Percent of Companies Paying Entire Premium

Average
Percentiles

10th 25th 50th 75th 90th

Employee

69%

0%

55%

77%

100%

100%

26%

Employee + Child

66%

0%

52%

74%

85%

100%

15%

Employee + Spouse

64%

0%

50%

72%

84%

100%

14%

Family

63%

0%

50%

72%

83%

100%

14%

Deductibles and Co-Insurance
Eighty-two percent of dental plans apply a per person/per family annual deductible. The most common annual deductible is $50 per person and $150 per family. For those plans with deductibles applied by treatment, the most common amount is $50 per procedure.

Although most plans apply an annual deductible to dental care expenses, the majority (91 percent) waive this deductible for preventive care. Once an insured employee meets the annual deductible amount, the most common level of reimbursement is 80 percent of the expense for basic procedures and 50 percent of the expense for major procedures.

OOP Limits and Annual Reimbursement Limits
Ninety-seven percent of plans do not place limits on the out-of-pocket expenses incurred by the insured for dental care. Ninety-nine percent of plans do not impose lifetime reimbursement limits on dental care expenses. However, most plans place annual reimbursement limits on dental care expenses. Typically, annual per person reimbursement limits range between $1,000 and $2,000 per year (Table 6).

Table 6: Dental Expense Reimbursement Limits
Per Person Annual Limit	Percent of Plans
$1000	24%
$1500	46%
$2000	20%
Other Amount	10%

Orthodontics
Most dental plans offer some coverage for orthodontic expenses, however it is not uncommon for dental plans to cover orthodontic expenses for children only, with 42 percent of plans doing so
(Table 7).

Table 7: Offer Orthodontic Expense Coverage
Type of Coverage	Percent of Plans
Children Only	42%
Children and Adults	35%
None Offered	23%

Eighty-nine percent of plans impose a lifetime per person limit on orthodontic expense reimbursement. The limits typically range from $1,000 to $1,500 (Table 8).

Table 8: Orthodontic Reimbursement Limits
Lifetime Per Person Limit	Percent of Plans
$1000	33%
$1500	47%
$2000	8%
Other Amount	11%

Summary
Dental PPO plans are the most common form of dental plan offered to employees in technology companies with 77 percent of companies currently offering them. All dental plans cover preventive care expenses, but few cover cosmetic treatments such as teeth whitening/bleaching. Although few dental plans set lifetime reimbursement limits, most control expenses through annual reimbursement limits ranging between $1,000 to $2,000 per year. Dental plans continue to be an important component of comprehensive benefit packages for U.S. employees with 95 percent of companies offering them.

Data source: October 2005 Culpepper Benefits Survey of 110 organizations.
Median size: 212 employees with a minimum of 9 and maximum of 3,400.
Breakdown of company types: 53 percent software, 21 percent IT services, 7 percent hardware/electronics, 5 percent life sciences and 14 percent other technology.

Costs and Coverage of Dental Benefits November 2005

Costs and Coverage of Dental Benefits
November 2005