Dental coverage is not considered “insurance” in the typical meaning as claims are, for the most part routine procedures and not random or unexpected. Unlike health plans that are designed to provide protection against financial hardship associated with an unforeseen medical condition, services covered under Dental plans are mostly predictable, short-term and not catastrophic.
Dental services are typically grouped into the following major categories:
- Covers procedures including diagnostic services, preventative treatments including routine teeth cleaning, fillings, endodontic services, periodontics, tooth extractions and minor surgical procedures
- Diagnostic procedures include dental exams to a evaluate a patient’s condition as well as to determine future treatment, oral examinations, recall examinations, x-rays and laboratory reports
- Preventative procedures include teeth cleaning including polishing and light scaling, fluoride treatment
- Dental surgery including the surgical removal of teeth, minor restorative treatment used to restore the use of teeth including fillings which may be caused by wear and decay. Periodontic services to treat the bone and gums around teeth including deep scaling of teeth and periodontal appliances such as mouthguards and endodontic services to treat the root and nerve of teeth. Relining, rebasing and repairing of dentures crowns or bridgework
- Provides coverage for dentures, bridges, crowns, veneers and prosthodontics to replace missing teeth and major surgical procedures which restore the functioning of natural teeth.
- Provides coverage for procedures and appliances related to braces required to straighten teeth and correct other dental defects including wires, tooth bonding, space maintainers or other mechanical aids used to reposition teeth.
Dental costs are driven primarily by utilization and Dental fee guide increases annually and given the elective nature of treatment, an employee can postpone having services completed, particularly when awaiting qualification for coverage if the plan has a waiting period. Costs also rise dramatically during layoffs, downsizing or periods of employment uncertainty and change such as mergers or acquisitions. If employees fear loss of coverage they will often go the dentist to have services performed for themselves and their dependents.
To help control cost and cost escalation, almost all Dental plans incorporate some form of protection including:
- Coverage limits
- Fee Guides
- Pre-determination of benefits
- Alternative benefit clauses
Almost all Dentists are paid on a fee-for-service basis directly by insurers through electronic data interchange (EDI) at point of sale. Under the EDI system claims data is sent electronically between the dentist and the insurer through CDAnet (electronic network developed by the Canadian Dental Association and the Provincial Dental Associations). Online adjudication allows complete transparency at point of sale of how much of the Dental claims is covered by the plan and any out-of-pocket expenses required by the member due to deductibles and coinsurance.
Deductibles and Coinsurance
Deductibles and coinsurance provisions help to limit cost by cost-sharing with employees. Deductibles included within Dental care plans are typically in the form of a calendar year deductible that requires employees and their dependents to pay a fixed dollar cost of covered expenses before coverage starts. Most plans include family limits on the deductible required and a typical plan requires a deductible of $25 per covered person, to a maximum of $50 per covered family.
Most Dental plans include coinsurance provisions that apply once the deductible has been satisfied (if applicable) which indicate the level of coverage that is provided under the plan. Most commonly, coinsurance for Basic Services is higher than for Major Services and Orthodontic Services. Most plans provide reimbursement between 80% and 100% for Basic Services, although a trend has been to move away from providing 100% coverage to drive themes of consumerism within the Dental plan design. Others view providing 100% coverage for Preventative Services within the Basic Services plan as a strong incentive for employees and their families to maintain proper Dental health which may lead to lower average Dental costs in the future. Coverage for Major Services and Orthodontic Services is typically provided at 50%.
Deductibles and Coinsurance, when monitored and adjusted periodically will help employers mitigate the impact of cost escalation and utilization.
Almost all Dental plans include calendar year or lifetime maximums within the Dental plan design. Most plans combine the calendar year maximum for Basic and Major Services, with a typical range of $1,000 to $2,000 per covered person. Orthodontics are usually provided with a separate maximum from Basic and Major Services and provide a lifetime maximum of between $1,000 to $3,000 per covered person.
Periodontics are typically also limited to a number of 15-minute units to ensure that employees and / or Dentists are not taking advantage of the plan. Scaling is typically limited to between 8 and 16 units per calendar year.
Many plans limit Orthodontic coverage to children under the age of 19 as many of the services covered under this benefit are confirmed to be effective up to a certain age.
Given the high cost of Major Services, in addition to benefit maximums, there are typically limits on replacement frequency of specific appliances. Commonly existing dentures, crown and bridgework may not be replaced unless they are at least 3-5 years old or beyond repair. In addition, replacement of temporary dentures with permanent dentures may usually only covered if completed within 12 months.
Eligibility for certain services may sometimes be limited to the length of time that an employee or dependent is covered under the plan. In some cases Dental benefit maximums may be increased on a step basis. For example, employees and their dependents may only be covered for $1,000 of Basic and Major Services for the first year of coverage under the plan, then an increase to $1,500 is provided in subsequent years after the initial 12 months.
The amount paid for every single Dental procedure can be determined by the Provincial fee guide set by each Province’s Dental Association and outlined by specific procedure codes. Each Province sets the “reasonable and customary” or “R&C” paid for each and every Dental procedure that is performed by Dentists.
Most plans will base the amount payable under the Dental plan by the fee guide in effect for each Province with the amount listed as the suggested fee for the applicable year.
Most services are covered within the general practitioner fee guide, however some Provinces issue fee guides for specialist procedures such as Dental surgeons. For the most part, specialist fees are up to 20% higher that those of general practitioners. As a result, many employer plans do not cover specialist fees guides and will only pay the suggested fees listed in the general practitioner fee guides.
Each Provincial Dental Association adjusts their fee guides on an annual basis (except for Alberta which we will cover below) to account for general inflation as measured by the change in the Consumer Price Index. It is up to the employer to decide which fee guide will be applicable within their employee benefits plan, however, most plans provide coverage for the current fee guide, or the prior year fee guide (some plans, will cover a fixed fee guide, although this is becoming much less common). Under both of the current and lagged fee guide arrangements, prices are automatically updated annually with procedures covered at the intended fee guide without any intervention by the employer (i.e. insurer systems are automatically updated to account for the increase in R&C fees for every Dental procedure). In many cases, Dentists will accept the prior year’s fee guide as full payment for services and it is important for employers to educate their members to ask their Dentist if they do accept the prior year fee guide as full payment.
In Alberta, employers will use one of three methods to determine the basis for reimbursement:
- The Alberta blue Cross Usual and Customary Fee Guide
- The Blue Cross Fee Guide
- The 1997 Provincial Fee Guide updated annually
Each Province has its own Dental Association, however the Canadian Dental Association is the National association representing Canadian Dentists and to help provide consistency across Canada the Canadian Dental Association developed a Procedure Coding System to streamline the claim submission process. All Provincial Dental Associations use this system (except Quebec) to develop their Provincial fee guides. The Coding System outlines all of the different procedures by a number sequence:
- The first digit identifies the category of services
- The second digit identifies the classification of services
- The third digit identifies the sub-classification
- The fourth digit identifies the service
- The fifth digit identifies the unit of time performed
Each Dental fee guide is just that, a guide. The dentist may decide what to charge for the services performed.
Pre-Determination of Benefits
Almost all dental group insurance plans include a pre-determination provision for certain services that will cost more than a certain dollar threshold. This provision provides the insurance company an opportunity to assess and validate the necessity of the procedure and the associated pricing before the service is performed. This provision also provides the plan member an idea of what will be covered and how much will need to be paid out-of-pocket before proceeding with treatment.
The typical process requires that the dentist submit a treatment plan including a pre-treatment form that describes the recommended treatment and the estimated costs. After reviewing the treatment plan, a claims assessor will advise the dentist and the plan member what will be covered and the amount reimbursed under the plan after any deductibles or benefit limits. Once treatment has been approved it must begin within 90 days. Most pre-determinations are required for Major or Orthodontic services given the high cost of those procedures.
Alternative Benefit Provision
Members who do not follow the pre-determination provision prior to proceeding with expensive Dental procedures may incur higher than anticipated costs associated with their treatments because of the alternative benefit provision. This provision allows insurers to substitute the cost of more expensive procedures with lessor cost procedures if they determine that they can produce similar results.
There are usually many different procedures that can be used to treat the same dental problem and this provision allows the insurer to pay for the lowest cost dental treatment available for any given dental treatment based on their in-house claims adjudication practices.