Did you know that even small Vermont employer groups (with as few as 10 employees) can offer dental benefits on a self-insured basis with minimal risk to the plan sponsor (i.e. the employer)? As one client said to me years ago, “Self-funded dental is a no-brainer”. These plans are well-suited for both for-profit companies and non-profit organizations. The advantages of implementing this type of dental coverage include:

• The likelihood of saving money when compared to fully-insured plans over the long term;
• The ability to design the plan coverages to best suit the needs of your employees;
• The freedom of employees to select their own dentist;
• The ability of the plan sponsor to adjust benefits at any time; and
• The satisfaction of knowing that virtually all of the plan cost is being applied directly toward paying dental claims.

Typically, a local Vermont third party administrator (TPA) is hired to process and pay claims directly to the provider based on the statement of charges supplied by the dental practice. The TPA also generates monthly aggregate claims reports to advise the plan sponsor of the processed claims that need to be funded. This same report compares actual claims experience on a monthly and cumulative basis against the projected claims cost.

For these services the administrator is paid a modest fee per participating employee per month ranging between $4.00 and $7.00. To initially implement a self-funded plan, the TPA charges a modest one-time set-up fee based on the size of the group and the complexity of the plan.

The TPA, working with your benefits broker and the plan sponsor, also prepares a brief plan document that outlines the covered benefits, the maximum annual benefits to be paid per participant and those services excluded from coverage. Once approved by the employer, a summary plan description (SPD) is prepared in an easy-to-read format and distributed to each participating employee. This document sets the eligibility requirements, the specific dental benefits to be covered including the annual cap and instrutions for submitting claims for payment. To ensure the success of the self-funded plan, the employer can require a minimum participation level among the staff, similar to that required by dental carriers under fully-insured plans.

As an employer gains more confidence with the predictability of self-funding, the owners may elect to expand benefits to cover more expensive dental procedures by simply amending the plan.

Contributory and non-contributory dental plans in which the majority of eligible employees participate are best suited for this self-funded option. It is not recommended to offer a voluntary dental plan using this model whereby the employees pay the entire cost of the plan through payroll deductions. Under a contributory plan, the participating employees pay a portion of the plan cost through a payroll deduction with the balance picked up by the employer. With a non-contributory plan, the employer pays the entire cost of the dental plan.