Cash plan vs insurance: Molar opposites

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Both dental insurance and dental cash plans put a smile on employees’ faces but in which situations does each product work best? Sam Barrett investigates

The high claims frequency and health benefits of dental plans can appeal to both employers and employees. However, with cover available through standalone plans and healthcare cash plans, choosing the most suitable product is not always straightforward.

The benefits of providing help with the cost of dental treatment are well understood.

“Regular check-ups are important for prevention,” says The Health Insurance Group head of commercial Carol Porter. “And poor oral health is linked to a number of serious health conditions, including heart disease and diabetes. Unfortunately, though, concerns about the cost of treatment can prevent some employees from visiting their dentist altogether.”

NHS dentistry

The Government has taken steps to address these concerns by improving access to NHS den­tistry. As a result, when it released two-year figures up to September 2015 there was shown to be an increase of 100,000 in the number of people who had seen an NHS dentist.

However, despite this wider access to NHS treatment the cost can nevertheless be a deterrent for many employees. Patients face one of three charges dependent on the amount of treatment required. These range from £18.80 for an examination, x-rays and a scale and polish to £222.50 if more complex procedures such as crowns and bridges are required.

While the top band may seem expensive, patients of private dentists can only dream of such charges. Denplan corporate channel manager Colin Perry says: “According to our claims figures for 2015, the average private examination cost £40, a scale and polish came in at £53, a crown cost £438 and a bridge cost £630.”

Given these prices, it is hardly surprising there is demand for products that include dental benefits. LaingBuisson reported a 12 per cent increase in sales of healthcare cash plans in 2014, with the number covered more than doubling over the past five years. Similarly, subscriber numbers for corporate dental insurance plans have grown by 28 per cent over the past five years, with insurers reporting that the bulk of this increase derives from the company-paid market.

Cover cost comparison

Although dental plans and cash plans differ greatly, both can provide generous amounts of cover.

“A cash plan at £1 a week provides around £60 of dental cover a year,” says Willis PMI Group compliance director Mike Blake. “If you have an NHS dentist or good oral health, this may be sufficient.”

Paying a higher premium enables employees to access more treatment if required. For example, on Health Shield’s company-paid Essentials cash plan a weekly premium of £5.60 gives up to £210 of dental benefit plus a further £800 of dental accident cover.

On the other hand, if an employer wants to provide more generous cover a dental plan is more suitable. For example, at the top of its wellbeing range Denplan’s Extensive Plus plan costs an employer £24.10 a month per employee if it covers 100 employees in its scheme. This gives employees access to up to £2,320 per policy year, including up to £100 towards examinations, £140 for hygienist treatment and, subject to a reimbursement rate of 80 per cent, up to £2,000 towards restorative treatment.

However, while dental plans make a much bigger contribution to employees’ treatment bills, cash plans in fact provide a broader set of benefits. At £1 a week, in addition to £60 of dental cover Health Shield’s Essentials provides benefits including £60 of optical, £160 of physiotherapy, £60 of chiropody and £200 towards specialist consultations, scans and tests.

Deciding factors

In determining which type of cover is most appropriate there are a number of factors to consider, chief of which is budget, according to Porter.

“If there isn’t a lot of money to play with, a cash plan, with its breadth of benefits, can represent better value. A low-cost dental plan will provide sufficient cover for some employees but differences in the amount of work needed and the cost of treatment mean it won’t necessarily pick up all employees’ dental bills,” she says.

One way around this is by enabling employees to flex up their dental cover. For example, Denplan offers six products in its dental plan ranges, with employers often paying for a base level for all employees and giving them the option to increase cover if they choose.

Age can also play a part. “Younger people often prefer a broad plan that gives them access to a range of benefits, such as dental and physiotherapy, which may suit their lifestyle,” says WPA commercial director Mark Southern. “An older workforce can appreciate a dental plan more: they may need more expensive treatment and a plan can help them budget for these costs.”

The type of workforce may also influence the choice of plan, according to Cigna UK Healthcare Benefits dental product manager Yvonne Gleeson. “As they’re a cost-effective way to provide money towards everyday preventative healthcare costs, cash plans may be more successful in organisations with many lower-paid employees, such as the hospitality or retail industry,” she says. “On the other hand, dental insurance plans are a great recruitment and retention tool for many employers and may be more popular among typical white-collar segments such as finance and banking.”

Also playing a part are the availability of NHS dentists and the cost of treatment in a par­ticular area. Blake says higher charges and a shortage of NHS dentists have made dental insurance a standard part of benefits packages in London.

Some providers address this issue by offering mobile dentistry. NDP recently introduced this facility for larger employers, enabling employees to book app­ointments online for a check-up and any preventive treatment.

Working together

But it is rarely a case of either/or with dental insurance and cash plans, with each having benefits that appeal to employers and employees. Subsequently, providers have become much more flexible, enabling their products to run alongside one another.

Often the cash plan will flex to accommodate the dental insurance, with many providers able to remove any duplicated benefit to reduce the cost. Similarly, some cash plan providers recognise the popularity of dental plans and make provision for them in their benefits. For example, Health Shield allows members to claim for a practice’s dental plan premium as part of its dental benefit.

Equally, some dental plan providers will flex their products to accommodate a cash plan. For example, where a cash plan is already in place, NDP will adapt its dental plan to sit more seamlessly alongside it.

NDP business development director Andrew Morris says: “We’ve had a couple of instances where an employer has offered a cash plan for several years and, although employees really appreciate it, they want more dental cover. We’ve been able to tailor, on a case-by-case basis, a restorative-only plan to pick up any treatment costs beyond the cash plan benefit.”

With the ability to flex up cover through both types of product, employees have plenty of dental options to choose from. Employers, meanwhile, can benefit too as improved employee healthcare helps to both reduce absence and attract and retain talent.

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