Download Bundling Vision and Dental: When Is It the Best Option?

Bundling Vision and Dental:
When Is It the Best Option?
By Karen Gustin, LLIF, Ameritas Group, Lincoln, Neb.
We’ve all heard about the potential for cost savings by bundling medical insurance benefits with ancillary plans, such as
dental or vision. But are the savings real? And are these options best for employers and employees?
Bundled benefit plans may look good on paper, but they can lack the specific benefits employees want and the savings employers expect. These plans need to be examined to avoid potential problems. Consider the following five criteria
when reviewing bundled plans:
Plan design
You probably have heard that every insurance carrier offers a different design for bundled medical and ancillary
plans, such as dental and vision benefits. It is important to understand how these benefit plans are set up. Check for waiting
periods that members must meet before using the benefits and whether there are exclusions and conditions for coverage.
Read the fine print. Often plan restrictions are placed within sections of small type, so it is easy to overlook them.
Members using the benefits may not be aware of any plan limitations until coverage for procedures is denied.
Look for hidden coverage information. With some bundled medical plans, details on dental or vision benefits may be
buried within the plan description. If dental or vision coverage options are not communicated clearly, employees can forget
about these benefits and not use them.
High deductibles
Some medical plans bundled with dental or vision options feature high deductibles for all benefit services. Most
annual visits for dental or vision cost around $200, which is a significant amount for employees to pay out of pocket, especially in our current economy. The high deductible becomes a barrier or disincentive for employees to use their dental or
vision benefits.
Pricing
Some medical carriers offer a flat discount off of their medical premium to employers that agree to add in an ancillary dental plan. While the advertised price may look like a good deal, ask these questions:
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Will the plan(s) meet the needs of employers and employees?
Does the carrier have a history of consistent pricing?
How long will the carrier honor discounted rates?
At renewal time, will the carrier increase the price to offset costs it incurs with the discounted plans?
Pitfalls and unexpected costs
It is difficult to predict the future. During the year, a business may make decisions that require changes to benefit
plans. Or employees may experience coverage problems, and the plan must be amended or dropped.
What are the hidden costs of updating or changing benefit plans? If employers participate in a discounted bundled
medical plan, what happens if one of the benefits is removed? Will the carrier honor the discounted price for the retained
product? If the medical, dental or vision plans need to be reissued, what costs will employers and employees incur?
As submitted for publication in California Broker, December 2012
Utilization issues
When medical is bundled with an ancillary product, such as dental and vision, it is difficult to identify how the
various benefits are used without investing considerable time in evaluating the claims. And during benefit renewal discussions, it is hard to determine if plans need to be changed to make them more efficient or to better meet employees’ needs.
Claims processing
Dental and vision are preventive care benefits, and they tend to be used more frequently by employees and their
dependents. Medical carriers that are not prepared to handle a high volume of claims may encounter unexpected problems.
Find out whether the carrier offering a bundled medical-dental or vision plan intends to process all these claims
through the same processing system. Single-system claims processing may result in numerous errors. They also may use the
same claims examiners to pay both medical and dental. When it comes to paying claims, expertise matters – quality and
accuracy may be compromised.
Bundle the right products
Under health care reform, Americans are required to have medical insurance and limited pediatric dental and
vision coverage.
If medical, dental and/or vision are bundled with a single deductible, say $500 or more, dental and vision benefits may
never be paid.
Bundling guidelines
When deciding whether or not to recommend a bundled medical plan with dental and/or vision, thoroughly
review these components:
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plan design
deductible amount
pricing and the costs or problems associated with unbundling
carrier’s claims processing experience
combination of benefits bundled
Designing a plan that fits employers’ needs should be an important focus for the carrier(s) selected for employee
benefits. Insurance carriers that specialize in dental and vision coverage have greater expertise and flexibility in customizing plan designs with a range of options and pricing to meet specific needs of the employee group.
Karen M. Gustin, LLIF, is senior vice president – group field sales, national accounts and broker blocks for Ameritas Group, a
division of Ameritas Life Insurance Corp., with headquarters in Lincoln, Neb. A leading provider of dental and vision products
and services, Ameritas Group added hearing care to its product portfolio in 2008. Gustin joined Ameritas Group in 1983.
She is past chair of the National Association of Dental Plans board of directors and serves on the board of the National
Association of Vision Care Plans.
As submitted for publication in California Broker, December 2012