When it comes to group dental benefits, both large and even very small Vermont employers have the option of offering fully-insured or self-funded coverage. A fully-insured dental plan is certainly worry-free, but it can also be expensive. On the other hand a self-insured dental plan is less costly and incorporates safeguards to protect the employer against unusually high claims through caps placed on the total benefits to be paid out to a participant over the course of the calendar year.

Whether your company currently offers a group dental plan or you are contemplating adding this benefit, Benefit Design & Strategies can produce comprehensive quotations for both types of dental coverage. We are licensed with at least 6 dental carriers, including Northeast Delta Dental and have relationships with several dental TPA's. Our proposals explain the advantages and disadvantages as well as the risks and rewards of each solution.

FULLY INSURED DENTAL PLANS

Fully-insured group dental plans in Vermont can be divided by the type of funding arrangement selected:

1. Non-contributory
2. Contributory
3. Voluntary

The non-contributory plan requires the employer to pay 100% of the premium; it usually has the most competitive rates, but carriers often require 100% of eligible employees be enrolled.

Under a contributory plan both the employer and participating employees share in the cost of the monthly premiums with the employees' portion often paid through a Flexible Benefit Plan. Rates are likely to be slightly higher. Minimum participation levels among eligible employees are often imposed.

A voluntary plan, as the name implies, is one where the employee can elect to join and agrees to pay the entire premium through payroll-deduction or in pre-tax dollars via the Flex Plan if one is offered. The employer sponsors the plan and is responsible for collecting the premiums and maintaining an accurate list of enrollees. Voluntary plans are usually the most expensive because of an insurance concept called "adverse selection". Most insurers require minimum participation levels to ensure the plan is profitable.

SELF-FUNDED DENTAL PLANS

Dental benefits can also be offered on a self-insured basis with minimal risk to the plan sponsor (i.e. the Vermont employer), even for groups with as few as 5 eligible employees. The biggest advantage is the knowledge that the highest percentage of the plan cost is being applied directly toward paying dental charges. Typically, a third party administrator (TPA) is hired to process and pay claims. Monthly aggregate claims reports are generated by the TPA to advise the plan sponsor of the cumulative amount of processed claims to be funded and to monitor the actual versus projected claims experience.

For these services the administrator is paid a modest fee per participating employee per month. To initially implement the self-funded plan, the TPA will usually charge a modest one-time set-up fee based on the size of the group. Contributory or non-contributory dental plans are best suited for the self-funded option while voluntary plans are not recommended.