Traditional style dental, vision, and Direct Reimbursement Plans.
We have the capability of administering a traditional style dental and vision plans and Direct Reimbursement Plan (DR Plans). The DR Plans have proven to be very popular with the groups that have implemented them.
The Direct Reimbursement (DR) dental and vision plans are a flexible, effective, user-friendly self-funded employee benefit. DR Plans are a dollar based benefit rather than a procedure based benefit. The plan is set up to provide a certain amount of dollars for the employee to use at the dentist or eye doctor's office.
The first big question that comes up is about cost control. While this is a major concern with a medical plan it is not a big factor in dental plans. There are several reasons that this is not a major factor; the first and most important reason is the dentist chair - no one spends more time in the chair than they have to. People will not abuse their use of the dentist office like they will a doctor's office. A second reason is a plan that is designed to share the cost with the employee through deductibles and co-payments which helps prevents abuse of the plan. When you have a plan of this type, where the benefits are limited to a certain amount per year, there are no catastrophic losses such as a heart attack, and usage can be predicted fairly accurately, is there a need to have it "insured"? The majority of dental plans pay out less in claims and administration costs than they charge in premiums.
An asset of this type of plan is the employee can use the dentist or eye doctor of their choice. The dentist and employee can decide what the best treatment for a situation is and the decision is not based on how an insurance company will pay. The vision benefit can be used towards the employee's specific need, whether it is an exam, lens, frames or contact lenses.
Another asset is the plan is easy to understand, you always know what the payment is on any given procedure. This makes it very easy to coordinate with a cafeteria plan.
There is not another dental or vision plan available that is as flexible as this one in benefit design or working to a specific dollar amount for the cost.
Another comment that comes up is that we need networks and Usual and Customary (U & C) in a plan. Networks have never shown that they control costs over a period of time. With any network, whether it is a Medical or Dental network, there is nothing in place that stops the provider from increasing their charges and then giving a discount so they are actually collecting the same amount before there was a network involved. U&C has proven to save plans about 3% on costs - and increases costs by 4% to administer for U& C. So are networks and U&C really necessary?
Where does the money for the monthly costs go? We set up an account in the employer's name that the money is deposited into, then, every week when claims are processed we sweep the money out of the account to cover the claims cost. Once every month the administration fee is also taken out of the account. Every month the employer receives reports on the claims with a reconciled bank statement showing where the money has been spent.