EBN recently picked the brains of executives at leading dental benefits providers and dental benefits organizations to ask them about what trends they saw emerging in dental benefits over the next several years, and the tips they'd offer to employers to make sure their dental benefits matched those trends.

The recession is affecting all types of benefits - even the once recession-proof dental - so as you might expect, the rise of voluntary offerings and tips for cost-cutting were front of mind. Take their comments under consideration as you plan your strategy for this fall's open enrollment.

Trends to watch

Evelyn Ireland, President, National Association of Dental Plans

1. Impact of health care reform.

While congressional debates on health care reform are centered on the medical system and medical coverage, the results could reshape the entire market for all benefits. Many of the elements of health care reform could affect dental benefits by definition rather than design. Dental is not the intended target, but the industry does suffer collateral damage. Other areas to watch:

•  Taxation. Dental benefits are excluded from income of employees' and employers' FICA taxes as they are encompassed in the tax code definitions of health coverage. NADP is working to assure that changes in the tax deductibility of benefits do not have a disparate impact on dental benefits.

•  Exchange. If enacted, a health care exchange could offer another avenue for purchase of dental benefits as an optional coverage.

•  Tax credits. Discussion of tax credits for employers that pay a portion of the premium for low income employees (up to 300% of poverty) could be extended to dental benefits as well.

2. The connection between oral health and medical cost savings.

For certain medical conditions and chronic diseases - cardiovascular disease, diabetes and pregnancy - studies continue to provide evidence of cost-savings.

In 2008, the University of Michigan School of Dentistry and the Blue Cross Blue Shield Foundation of Michigan announced findings from an analysis of five years of health claims data showing that for people with diabetes, regular periodontal services can lower overall medical and pharmacy costs by more than 10% and diabetes-related medical costs can be lowered by as much as 19%.

Earlier studies indicate that a person with periodontal disease is up to four times more likely to develop heart disease and has twice the prevalence of diabetes than those without the disease. Pregnant women with periodontal disease are at an increased risk for preterm births and low-birthweight babies.

3. Continued enrollment growth.

Preliminary data from the annual NADP/DDPA Enrollment Study shows a marked increase in enrollment for 2008 - far ahead of the previous years' trend of keeping pace with population increases. Early sales data for 2009 also follow this pattern.

NADP's 2008 Employer Survey, conducted every three years, provides some insight to this trend. Sixty-two percent of employers view dental coverage as essential to their benefits packages, up from 53% in 2005. The largest increase was reported by employers with 250 to 999 employees - a 16% increase since 2005, from 55% to 71%.

4. Comprehensive benefits with key features.

NADP's 2008 Employer Survey found that about 60% of employers with and without dental benefits look first for comprehensive benefits. But they are also focused on a number of key coverages and features within those plans. Five specific features in employee dental benefit plans were targeted by more than 70% of all employers: sealants (77%); benefit rollovers (76%); enhanced benefits for related medical conditions (75%); adult orthodontia (73%); and dental implants (72%).

Tom Dolatowski, vice president of business development, Delta Dental Plans Association

5. Employees will continue to be more involved in the decision to purchase dental benefits, whether covered by an employer-sponsored or voluntary plan, as we are already seeing higher employee contribution levels through voluntary plans, consumer-directed plans and the growth of individual coverage.

6. Plan design innovations will continue the movement toward evidence-based dentistry and higher annual maximum benefits.

7. Carriers will begin to develop performance-based networks.

8. More analysis of members' risk, disease status and use of services, which will help identify at-risk members and members with chronic disease.

9. Continued movement toward fee transparency. More tools will be developed to help consumers compare dentist fees.

Bebe Shuler-Mure, assistant vice president of dental product, Cigna, & Dr. Miles Hall, dental chief clinical director, Cigna

10. Impact of an uncertain economy on budgets of all kinds.

The impact of today's uncertain economy goes beyond what had historically been the compression of the benefits dollar due to rising medical costs. Now, employers and employees alike are seeking options that can help alleviate difficult decisions forced by the economic downturn. These include:

•  More affordable plan designs with scaled-back benefits, such as coverage for preventive and diagnostic or Class I-only services, and then access to PPO discounts for services that aren't covered.

•  A renewed interest in dental HMO plans and dental discount plans.

•  Options that allow employers that haven't previously provided dental benefits to offer a low-cost voluntary plan to round out their employee benefits plan.

All carriers are providing options to employers for leaner plan designs to meet their needs for lower price points on all products.We have seen a steady growth of voluntary or low-employer contributory plans even for employers that had historically rich plan designs, in response to the compression of the benefits dollar. Employers are increasingly asking for client-specific networks, where an employer chooses to only provide access to the most cost-effective dental care professionals.

A February survey conducted by Yankelovich for Cigna showed that employees rank dental insurance as one of the important types of insurance to have, so employers should continue to look for ways to offer these benefits.

11.More active participation by consumers.

We continue to see increased interest in rollover-type plans. We also continue to see demand from employers to package together plan designs where employers fund or partially fund a basic plan design, with employees buying up to more robust coverage.

These marketplace changes and the increased focus on prevention have led to a proliferation of consumer decision-support tools; many carriers have recently added cavity and periodontal risk assessment tools to their other online capabilities.

Finally, employers are responding to employee preferences to add coverage for previously noncovered services, such as cosmetic dentistry and implants.

12. Building network capabilities.

Carriers are moving toward segmenting or tiering and leasing third-party networks for greater network reach.Many carriers, Cigna included, provide discounts for noncovered services to people enrolled in the plan. This benefits individuals in several ways.

Specifically, if a person has a preventive and diagnostic only (Class 1 only) plan, or preventive and diagnostic and basic care (Class 1- and 2-only) plan, they can still receive a discount on other services not covered on their plan when they visit an in-network dentist. Expanding network access makes these services more affordable and more widely available.Carriers are also moving toward providing employers with repricing capabilities for those wishing to self-administer.

Chris Swanker, vice president, Guardian Group Dental

13. Stretching annual maximums.

Employers can get more value out of a plan by adding features that will allow them to lower maximums while still offering strong benefits to their employees. Examples of this are plans that rollover annual maximums for future use or allow members to receive preventive care without it being deducted from the annual maximum.

14. Consumer-focused approach.

As employees become used to having higher deductible plans and using tax-favored vehicles, such as HSA and FSAs, to fund out-of-pocket costs, dental plans with high maximums and high deductibles may gain popularity. These plans offer comprehensive benefits at a lower cost.

Tips to follow

Roni Grossman, communications director, Aetna product group

1. Consider providing lower-cost plan options and alternatives, like DMO products, and look for overall value.

Low price is important, but look for an insurer that provides overall value through network access, discounts and superior customer service.

2. Ask for value-added extras.

Not all insurers are the same.Some offeremployees access towellness programs and value-added discounts for members, e.g., fitness, vision, hearing, weight management and other services.

3. Integrate your dental program with your medical program.

Integrating your medical and dental benefits can improve the health of your employees and reduce medical costs over time. Does your insurer use claim information tocontinually drive education and information to your employees to improve their oral and overall health - or do they just pay claims?

Michael Schwartz, vice president, dental product management, MetLife

4. Rethink plan design.

Many dental benefits plan designs that employers currently have in place may not reflect current research and industry trends, and therefore may not be as cost-effective as believed. There are several ways to re-evaluate plan design:

•  Cover at a higher percentage services that prevent and mitigate dental disease, and cover at lower levels services that are more elective. This can help with controlling costs while providing the services employees value.

•  Encouraging plan participants to maintain good oral health can help lower overall dental benefits costs for all stakeholders.

•  Review the frequency or age limitations on certain procedures. For example, replacement limits for crowns are typically on 60-month intervals, yet research supports the replacement for these services at twice that interval - 120 months.

5. Offer employees more plan choice.

Some employers that provide dental benefits offer only one plan, and the only choice employees may have is if they want to opt for single or family coverage. However, choice of plans can be very important to employees for improving benefits satisfaction.

A MetLife survey of employees found that approximately seven out of 10 feel that choices in plans are an important feature to have in a dental benefits offering. These choices in plan offerings could be between a DHMO and DPPO. Employees have a lower-cost option with a DHMO, but more coverage mobility and greater access to providers with the DPPO option. Dual options likely will become increasingly prevalent because they can increase employee satisfaction but minimally increase employers' overall dental benefits spend.

For example, two DPPO offerings can also provide employees with greater flexibility such as choices between different coverage levels, deductibles and annual maximums. At any time, but particularly in a tight economy, employees are likely to appreciate being able to adjust their benefits expenditures to their personal situations while still maintaining their oral health.

6. Offer voluntary dental benefits, including for retirees.

Voluntary dental benefits can be a cost-effective solution for many employers. For smaller employers, in particular, who do not yet offer dental benefits, adding voluntary dental benefits may help them compete for talent against larger contenders.

As illustration, 65% of employers with less than 500 employees offer dental benefits, compared to 93% of employers with 500 or more employees, according to the 7th Annual MetLife Study of Employee Benefits Trends.

When considering a voluntary dental benefit, also keep in mind the importance of dental benefits to retirees. For retirees facing financial challenges as well as limited choices for dental coverage, a voluntary dental program where retirees pay 100% of the premium provides them with the advantages of a group program without impacting the employer's bottom line.

Voluntary benefits in general, particularly retiree benefits, will likely continue to grow in popularity among employers because they enable employers to be responsive to their workforce's needs while still controlling cost objectives.

7. Make educational materials available and communicate them effectively.

While it may be stating the obvious, the goal of a dental benefits plan is to improve the oral health of participants. However, MetLife consumer research found that the majority of employees not only feel that they do not have enough information to make dental benefits decisions, but also that oral health information, in particular, is seemingly lacking.

Only 9% of employees reported that materials on oral health are available to them. If the materials are indeed available to employees but they are simply unaware of them, effective communications become even more critical for optimizing the value of the dental benefits plan.

Further, consider the relationship between personal health and personal wealth - specifically, how one's physical well-being may be related to his or her current and future financial situations. According to MetLife's Study of Employee Benefits Trends, employees who said they are in fair or poor health also said they are in worse financial shape than their healthier counterparts. For example, 59% of people who assess their medical health as fair or poor said that they live paycheck-to-paycheck, compared to 34% of people in very good or excellent health. Since certain oral health and medical conditions have been linked, promoting good oral health could have a discernable impact on an individual's overall health and well-being.

Karen Gustin, senior vice president, group marketing, managed care & national accounts, Ameritas Group

8. Investigate your choice of carriers, and ask questions that will position you for future needs.

Benefit and funding options are standard reasons why employers switch, and they can be avoided by upfront creativity and communication with the carrier.

Ask potential bidders what their block of business runs for similar case-size renewals in years two, three and beyond. This will give you an idea of how your renewals may look and how the carrier will manage your dollars.

Nicolas Partridge, president, Pendant Health

9. Make the economy work for you.

Employers are focused on getting to 2010 alive. There is cautious optimism regarding the second half of the year, but most firms are deeply entrenched in cost-savings mode.

As such, this is the right economic time to make fundamental changes to employee benefit plans. Not by simply cost-shifting, but rather by embracing plans that encourage employee engagement, healthy behaviors and employee self-management while limiting employers' financial liability.

The dental benefits marketplace provides a unique opportunity to offer creative solutions without the risk inherent with medical claims. As such, employers should investigate:

•  Plans that retain unused premium dollars.

• Tax-advantaged arrangements like FSAs, HRAs and HSAs.

•  Self-funding.