Dental Plan Options

[Guest tracy real]

What are the risks for self-insuring a dental plan? How do I calculate the potential liability? How risky could it be? It appears to be low to medium risk according to my novice calcs.

I have a choice in fully underwritten with premium and enrollment limitations, a rider to medical coverage taht forces ees to take the dental coverage or to self insure (annual max 1,500). My goal is to offer a free-standing dental plan. Self=insuring seems to be a good solution. Your Thoughts?

[KIP KRAUS]

Tracy:

There are so many things to consider when establishing a dental plan where no prior dental plan exists. You could solicit quotes from insurers and let them determine what your claims are going to be or you can hire a consultant to design a self-insured plan.

Depending on what size group you have going the insured route will typically be the most expensive route, they will be conservative in establishing initial expected claims, they will require a reserve, there will be premium taxes, risk charges, maybe commissions and a profit built into the rates.

Personally, on a dental plan of 100 or more employees, I’d never purchase a fully insured plan. I would always self-insure. I know there are brokers and insurance reps out there that will try to tell you different, but my answer to them is that there is nothing magic about dental plans or there administration.

If I was going to establish a new dental plan I’d design one that covered preventative services only @ 80% of R&C. Then in the second year I’d add minor restoration coverage @ 80% of R&C.

It wouldn’t hurt to contact a few brokers and discuss it with them. They will either want to solicit insurance quotes for you or, if they know what they’re doing charge you to design a self-insured plan, and there charge to do so shouldn’t be more than the commission you’ll have to pay to a broker on a full insured plan.