DENTAL AND VISION—WELL USED AND POPULAR
Preventative care is key; major carrier enters market
By Thomas A. McCoy, CLU
Dental and vision coverage rank just behind medical insurance and retirement plans in popularity among both benefit plan sponsors and participants, according to separate studies by MetLife and Aflac. Just as plan participants expect to draw on the benefits of their medical and retirement plans, those with dental and vision coverage plan on utilizing those benefits regularly, at least for routine dental and eye care visits.
“Employers and employees put a lot of value on dental and vision because they are highly utilized. These are benefits that employees can feel and touch, and are valued as important to their total benefits offering next to medical,” says Tina Santelli, CBC, CBDS, vice president, carrier partner management, of Alera Group, a nation-wide group of employee benefits-focused brokers headquartered in Deerfield, Illinois.
Alera’s broker firms operate in more than 100 locations and produce annual gross revenues of $575 million, 57% of which is employee benefits. The remainder of Alera’s revenue is from property/casualty and wealth management/retirement services.
Santelli estimates that more than 90% of its affiliated firms provide some kind of dental and vision plans, which can vary widely in plan design depending on the client’s needs and affordability. “Even if the employer can’t offer a traditional dental or vision plan, they can arrange for employees to have coverage that provides for discounted pricing,” she says.
John Thornton, executive vice president, sales and marketing, of Amalgamated Life Insurance Company, notes that IBIS World fore-casts the vision insurance market to grow by 1.7% in2021. “Others, such as the Global Vision Insurance Market Study, are projecting more significant growth in vision insurance over the next four years.
“One driver of growth for both dental and vision products,” Thornton explains, “has been the convergence of health and dental insurance. Many health plans are now including dental benefits, and industry projections are that this trend will continue.
“For larger employers, adding dental to their existing health plans may be an attractive option, but there are many middle market and smaller businesses for which the voluntary option is more financially feasible and a better fit for their workforce demographics.
“We feel strongly that there remains a strong market for stand-alone, voluntary dental plans. We believe that consumers view health and dental insurance as separate products and value having them treated independently.
“We’ve found that employers/plan sponsors that recognize the value of voluntary benefits will offer our full suite of voluntary products, including dental and vision, to their employees. This is especially true in organizations with a diverse, multi-generational workforce where giving employees the opportunity to select benefits based on their personal circumstances is important to the plan sponsor.”
Thornton says his company is experiencing steady interest in its dental business. The features of its dental plans that matter most to plan participants, Thornton says, are 100% coverage for preventative care services, offering single and family options, orthodontia coverage for adults and children, oral screenings, anesthesia and teeth whitening. “Those families with young children typically want family coverage,” he says.
Among Alera’s firms, Santelli says, “One of the features in dental plans that is appealing to employees is having coverage for their general cleanings that does not reduce their annual maximum amounts covered. Some employers are changing their plans to include this. We haven’t seen the annual maximums for dental increase beyond $1,500 or maybe $2,000 over the last 10 or 15 years. So, it makes sense to pay for the cleanings separately and keep the maximum intact for more costly dental procedures.
“One trend we’ve seen in the market for vision insurance,” Santelli states, is insurers looking at including coverage for an extra set of glasses for on-screen use. Many insurers are providing educational material on the adverse effects of too much screen time, and how glasses designed for blue-light screen protection can help minimize the strain on eyes, she says.
“With many people spending 12, 14 or more hours a day in front of a screen, coverage for the blue-light screen protection glasses is appealing to plan participants. Everyone has only one set of eyes, and if a serious issue goes undetected, the consequences could be significant.”
Portability of coverage for both dental and vision is important to plan participants, Santelli notes. “Employment trends have changed, and with millions of people working from home or having multiple jobs, being able to continue coverage through these changes is crucial. Keeping the coverage is key, and more important is keeping that coverage at the same rate when possible.”
Aflac introduced its first dental and vision insurance products for the employee benefits market in January of this year. Both coverages can be written on a voluntary, employer-contributory or 100% employer-paid basis. They are available to businesses with as few as three employees.
“As pandemic restrictions are lifted and more people are vaccinated, we anticipate many people will begin to catch up on doctors’ appointments missed last year,” says Diana Steinhoff, senior vice president of client solutions at Aflac. “We continue seeing more utilization of the coverages.”
Aflac’s vision coverage is offered in partnership with Davis Vision, a network of 85,000 providers, including independent private-practice optometrists and ophthalmologists, and retail in-store and online optical partners. The dental coverage is linked to a network of more than 80,000 unique providers.
The dental coverage has no waiting periods (except for orthodontic services), and no co-pays for most preventative procedures. Insureds can carry over $250 of coverage each calendar year toward their annual maximum, up to $1,000, as long as the total benefit amount paid stays below $500 for that calendar year.
In addition to coverage for regular eye exams, Aflac’s vision coverage includes a one-year breakage warranty for free repair of frames or lenses, a 25% discount off laser vision correction (LASIX), and frame allowances and discounts up to 20% on additional eyewear and 10% on disposable contact lenses.
Thornton notes that “COVID-19 prompted the closure of many dentist offices and vision care practices. This, in turn, had some employers with group health plans with bundled dental and vision questioning the value of the premium paid for these coverages. That said, I don’t believe there was a dramatic shift in the sales of dental or vision products.”
Santelli agrees that, in general, dental and vision benefits have weathered the pandemic well. “We have not seen a meaningful reduction in benefits, enrollment or groups,” she says.
“Utilization of dental and vision benefits did decline substantially in 2020 compared to the prior year, but by the third and fourth quarters of last year, we were seeing a steady increase in utilization of dental and vision benefits, and that has continued in the first quarter of 2021. Overall, for 2020, utilization of vision plans was down on average about 10%.
“Carriers created marketing campaigns to educate our brokers on the safety measures that dentists and eye care providers were taking, and the advantages of those visits versus going to the emergency room. Many carriers also provided rate holds or extended rate guarantees in order to create stability for employers and their employees.”
Steinhoff points out, “Employers and employees recognize that dental and vision insurance may have an important link to health insurance. Dental and vision exams and procedures can help identify early indicators of major health diseases such as diabetes, heart disease and cancer. This helps provide an excellent wellness component, which complements health insurance.”
Thornton agrees, citing a study by researchers at the Human Capital Management Services Group in which employers credited stand-alone vision coverage with detection of early signs of chronic diseases among employees, including high blood pressure and diabetes.
“Conveying the importance of dental and vision check-ups to overall health is an effective marketing strategy that does resonate with both employees and employers,” he says. “The need for adequate dental and vision coverages is being incorporated into employee wellness initiatives that emphasize the preventative healthcare message and the cost benefits.”
Santelli observes that employees have been paying more attention to all voluntary products, including dental and vision, in the last year. “They want to know, ‘What is covered and how am I going to utilize my voluntary benefits?’ We, as consultants, were encouraging employers and employees to study their benefits more closely.”
In response to the pandemic, she says, “We no longer could hold face-to-face annual meetings or even collect paper enrollments, so everything had to be digitized. At Alera, we developed our ‘Open Enrollment Cookbook’ to support clients in 2021 and beyond. It’s a semi-custom, turnkey campaign that features best practices for both enrollment and virtual benefits communication.
“It includes templates that our firms can provide to their employer clients by email. Employers can use the tool as guidance for communicating benefits information to plan participants. For those that don’t have a benefits administration platform or intranet for communicating benefits, it gives them what they need without increasing their overall costs.”
Dental and vision coverage, whether they are written on a voluntary or employer-paid basis, are a popular feature of many benefits plans. Because they stress preventative care, they seem likely to continue to grow in importance as employers and employees focus on wellness.
Thornton states, “Brokers should stress to employers that their current and future workers want choices in their benefits, and have definite preferences in what benefits they want to access through the workplace. Making them available to employees will help position an organization as being employee-centric, and will help them attract and retain the best workers.
“With dental and vision coverage there also are the heath and financial benefits of preventing serious medical conditions and their resulting health and financial consequences.”
For more information:
Amalgamated Life Insurance Company
Thomas A. McCoy, CLU, is an Indiana-based freelance insurance writer.