Buyer’s guide to dental benefits

Focus on facts

What are dental benefits?
These provide financial assistance with some, or all, of the costs of visiting a dentist and dental treatment. Benefits can be delivered through a dental insurance scheme, of which there are two types. One has cover limits for broad areas such as routine examinations, hygiene and restorative treatments, while the other, cheaper option offers cover for each type of treatment, for example root canal treatment, fillings, crowns and x-rays. Some insurance schemes also include an element of co-insurance. Dental benefits can also be accessed through a cash plan or as an option in some corporate private medical insurance schemes.

What are the origins of dental benefits?
In the corporate arena, dental insurance schemes first became available about 15 years ago after spending a decade in the individual market in the UK. Dental benefits have been available longer through cash plans, which predate the National Health Service (NHS).

Where can employers get more information and advice?
There is no independent body to provide details of all dental healthcare providers. Employers can get more information from an employee benefits consultant or healthcare intermediary.

Nuts and bolts

What is the annual spend on dental benefits?
According to Laing and Buisson’s Dentistry UK market report 2011, published in January 2011, spending on public sector (NHS) dentistry was about £3.32 billion, 58% of total spending, and private dentistry spend was about £2.4 billion, 42% of total primary care dentistry spending. In the private sector, £1.8 billion was paid directly to dentists by patients for private treatment, including fees reimbursed in whole or in part by dental insurance and health cash plan claims. Private patients covered by dental capitation plans spent £588 million in dental plan subscriptions in 2009/10.

Which dental providers have the biggest market share?
The three providers seen as having the largest market shares are Bupa, Cigna HealthCare and Denplan, which was acquired by Simplyhealth from Axa PPP Healthcare in December 2011. Others include Dencover, Medicash, Munroe Sutton and National Dental Plan.

Which providers increased their share the most over the past year?
It is difficult to know, but while dental providers indicated they had all seen steady growth, there is anecdotal evidence that cash plan providers may be taking some of their business.

In practice

What are the costs involved?
Dental insurance schemes start at about £7 a month per employee for menu-based products, with more comprehensive schemes starting at about £15 a month. Alternatively, dental benefits can be bought through a health cash plan for as little as £1 a week. Premiums are fairly static. On cash plans, it is not unusual for these to stay the same for at least 10 years.

Any legal implications?
There are no legal implications around offering dental benefits for staff.

What are the tax issues?
Whether offered through an insurance scheme or a cash plan, dental benefits are treated like other employer-paid plans and are subject to tax and national insurance as benefits in kind.

The advantages of dental healthcare to employers are clear, and cash plans may be the most economical way for employers to offer this benefit, says Clare Bettelley.

National Smile Week, which ran from 20 May to 20 June, is an annual campaign run by the British Dental Health Foundation to promote the importance of oral healthcare.

One of the campaign’s three objectives is to encourage people to visit their dentist more often, which is, increasingly, easier said than done given the rarity of National Health Service (NHS) dentists and relatively high costs of private dental care.

Research by Cigna HealthCare, published in July 2011, found that 93% of the 1,000 employees polled said their dental health was important or very important, but 30% had needed to delay or cancel treatment in the past year because of the cost. This helps to explain employees’ increasing demand for dental healthcare in their benefits package.

According to the Employee Benefits/Alexander Forbes Benefits research 2012, published in May, 27% of 174 respondents offered dental insurance on a voluntary basis, and 25% offered the benefit via a flexible benefits scheme. The research also found 11% had introduced dental insurance in the past 12 months.

This take-up may be low in comparison with other benefits, but there is a growing trend among employers to seek cost-effective dental cover for their employees, rather than insurance. One of the drivers of this trend is many employers’ decision to stop offering costly private medical insurance (PMI). David Castling, commercial sales manager at Engage Mutual, says: “Stripping out benefits and having nothing in place is clearly not a route [employers] want to go down.”

Health cash plans are a popular substitute for PMI, proving the ‘new black’ in dental healthcare. Henry Clover, deputy chief dental officer at Denplan, attributes cash plans’ increasing popularity to their simplicity. “Employers increasingly want to offer usable and relatively cost-effective benefits to their employees,” he says.

Robust benefit
Matthew Judge, director at Jelf Employee Benefits, adds. “For the last 20 or 30 years, [cash plans] have been considered as a poor man’s PMI, but they have now developed into quite a robust benefit.”

Various cash plans are available for employers to help staff cover their dental healthcare costs. For example, Simplyhealth offers cash plans from £1 a week per employee for £60 worth of cover a year. This runs alongside the provider’s dental insurance, which offers premiums from £7 a month per employee. By comparison, Cigna HealthCare’s standard insurance plan ranges from £3.31 to £20.18 a month per employee.

One of the most recent product launches is from Engage Mutual. Its health cash plan, launched last August, entitles employees to an annual allowance that they can spend on any one, or a range of, six treatment areas, from dental and optical to consultations, counselling, therapy and health screening. Castling says he has dealt with cases where employees have used 100% of their allowance for dental healthcare.

The plan costs from £10 a month for £720 worth of cover for the year to £20 a month for £1,440 worth of cover for the year and has a £40 excess. “We didn’t want a plan that just paid for a check-up,” says Castling.

But it may be some time before the market sees further product development. Jelf’s Judge says: “A lot [of providers] are waiting to see what the NHS fallouts are. If the NHS is to save £20 billion, logic says people can’t have all the cover they have now.”

The government plans to make £20 billion worth of cost savings across the NHS by 2015.Nevertheless, the need for comprehensive dental healthcare benefits will still grow, not least because of the potential risk to employee wellbeing and productivity if this is neglected. Poor dental health has been linked to increased risk of type two diabetes and direct links have been established between bacteria in the mouth and heart attacks: two factors that employers may want to bear in mind when reviewing their benefits offering.

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As Denplan’s Clover warns: “Potentially, in the short term, [the absence of dental benefits means] there is the risk that an employee would need unscheduled emergency care, which is likely to be disruptive to an organisation.” EB

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