Tag: Health Insurance

Advertiser Disclosure

News

What’s the Difference Between Dental Insurance and Dental Discount Plans?

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

iStock

Some employers offer dental insurance as an optional benefit, separate from health insurance. But those who don’t have this as an employer benefit, or don’t like their employer’s options, may want to find a plan on their own.

Choosing either dental insurance or a dental discount plan can save you big, but there are important differences to consider before deciding which route to choose.

Dental insurance versus dental discount plans

Before jumping into details, here’s a quick overview of the two offerings:

Dental insurance

Individual dental insurance costs more than insurance through an employer. According to the most recent figures from the National Association of Dental Plans, individual plans cost $4-$15 more per month than group plans (those offered through employers) and $20-$35 more for family plans. In 2016, the average DHMO (similar to HMOs for health insurance) premium cost $14.06 per month for employee-only coverage. The average DPPO cost $24.49 per month. Premiums for individual insurance would be higher, based on past research.

DHMOs are generally cheaper than DPPOs, both in premium and in service cost, but only if you go to an in-network provider, according to Guardian Life Insurance. Most DHMO networks are small, limiting your provider options, and you may be required to choose a primary care dentist. DPPO plans have larger networks and allow you to go to any dentist, though they may offer the best discount at in-network providers. DPPOs may have a maximum limit on coverage (often up to $2,000) per adult per year, while DHMOs do not have annual maximums, according to dental insurer Solstice Benefits.

Many dental insurance plans fully cover preventative care, like two cleanings and one set of X-rays per year. Insurers also tend to cover the majority (generally 80 percent) of basic procedure costs about half the cost of major procedures, according to Guardian Life. How much you have to pay will depend on the copay (DHMO) or coinsurance (DPPO) amounts set by your insurance. Your plan may or may not cover orthodontics, so that’s something to consider when shopping around.

Dental discount plans

With a discount plan, you pay a monthly or annual membership fee and will receive a discounted price on services. We looked at several discount plans on the comparison site DentalInsurance.com, and monthly membership fees for an individual range from about $8-$15, though costs vary by location.

Dental discount plan networks may be more limited than insurance networks, and compared with insurance, the out-of-pocket costs are often higher for patients. You can get full coverage of preventive care with a discount plan, but it’s less common than it is with insurance. With discount plans, there are no copays or coinsurance; rather, there are set discounts on specific services. Discounts range from about 20-50 percent, with routine procedures getting the highest discounts.

Based on a review of dental discount plans available online, it’s clear you’ll have to compare multiple plans to get a sense of your potential savings, as costs and coverage vary by provider and location.

Factors to consider when choosing one option over another
At first glance, you may think the only difference between dental insurance and a dental discount plan is the cost and amount of coverage, but there’s more to consider.

When do you need coverage to start?

Some insurance plans may allow you to get a cleaning or X-ray right away, but there are often waiting periods.

“It’s common to see six-month waits for fillings and one year for major services,” says Adam Hyers, owner of Hyers and Associates, an independent life and health insurance agency in Columbus, Ohio. “These waiting periods prevent consumers from abusing the plan” — using the insurance for a procedure and then dropping it right away.

By contrast, dental discount plans don’t have any waiting periods. It may take a few business days for your membership to go through. If you have an immediate (nonemergency) need, you may be able to pay for a dental discount plan and get a discount on the procedure a few days later.

How many options do you want?

An important consideration is how many dentists you can choose from, and if there’s a well-rated in-network dentist nearby. If you already have a dentist you like, check with the office to see if it will accept the insurance or discount plans you’re considering.

Brian Correia is a director of sales and client services for Solstice Benefits, which provides dental insurance and dental discount plans in five states. Correia says that generally, dentists who are just starting out will participate in dental discount plans and insurance networks because they’re trying to grow their customer base. Established dental businesses and chains might only accept insurance plans, although some offer in-house discount plans. Then there are dental practitioners who have a loyal client base.

“They may not take any insurance or discount plans, because people will keep coming to them and pay out of pocket,” says Correia. He adds that from a practitioner’s perspective, it’s easiest and most profitable to receive out-of-pocket payments from clients.

Dental insurance is the next most profitable for dental offices, because the dentist receives your copay or coinsurance and gets reimbursed from the insurance company. However, with a dental discount plan, the dentists only get what you pay — they don’t receive anything from the plan provider. That’s why new dentists, aiming to grow their client base, are often the only ones who accept discount plans and why your options may be limited.

What do the plans really cover?

As with any contract, you should carefully read the fine print before paying for insurance or a discount plan. Otherwise, you might be surprised to find out when you need to pay for a procedure, and how much it’ll cost you.

“With crowns and bridges, you might see a copay of $250 for a crown or bridge with an asterisk next to it,” Correia says. Read the content associated with the asterisk. It may say that laboratory fees — like the cost to get your new tooth molded — aren’t part of that copay and aren’t covered. You could also have to pay a materials fee if you want a more expensive material. And some inexpensive insurance policies may not offer any coverage for high-cost procedures, like a root canal.

Another fine-print point to consider is that your cost can vary depending on the dentist. Even two dental plan or insurance in-network dentists may charge different prices for the same procedure.

If you already have a dentist whom you want to stay with, you may want to call and confirm how different coverage will affect your costs. If you’re looking for a new dentist, create a short list of well-rated or recommended dentists and ask what your net cost will be before buying insurance or a dental plan.

Which option is best for you?

Compared with having no coverage at all, you can save money with either a dental insurance plan or a dental discount plan.

If you already have a dentist whom you like to visit and are looking to save money, your best bet may be to ask which options the dentist accepts and compare the costs for your family’s general needs. When you don’t have a dentist, it can be more difficult to compare all the different insurance and discount plans available.

For those who regularly get cleanings and don’t have a history of dental problems, a dental discount plan could provide adequate coverage for a low monthly fee. Although you may only break even or save a little money on your twice-a-year cleanings and annual X-ray, you’ll have some added security in knowing you can save money on other procedures. However, since the discount plan isn’t likely to cover the entire cost for major work, you may want to have some savings set aside for an emergency.

Buying dental insurance on your own could make both routine visits and emergencies more affordable, and may be the best option if you have a large family. But for individuals and those who aren’t prone to needing expensive dental care, the premiums can be so high, and the annual coverage limits so low, that you won’t always get a benefit.

Louis DeNicola
Louis DeNicola |

Louis DeNicola is a writer at MagnifyMoney. You can email Louis at louis@magnifymoney.com

TAGS: , ,

Advertiser Disclosure

Featured, Health

Open Enrollment Season: How to Choose the Right Health Plan

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

 

Smiling senior man having measured blood pressure

It’s that time of the year again — health care open enrollment. Open enrollment season is the time of the year when you enroll, re-enroll, or change your 2017 health insurance plan. These fall months are pretty crucial. Unless you have a qualifying life event (getting married, starting a new job, etc.), you won’t get another chance to change your benefits for another year.

Most Americans get their health care through three main options — Medicare, their employer, or the federal health care exchange.

  1. Medicare

Open enrollment for Medicare is between Oct. 15 and Dec. 7 each year. You can get a jump start on the enrollment period by reading up on the plans and options ahead of time in Medicare & You, which is updated each year.

  1. Your job

Enrollment for employer-provided health care plans varies since these plans are set by the employer. Enrollment is typically in the fall, and any changes will go into effect on Jan. 1 of the following year. Ask your employer’s human resources department when your deadline is to enroll.

  1. Obamacare

Open enrollment through the state and federal Health Insurance Marketplace begins Nov. 1, and closes Jan. 31. Keep up on important deadlines here. If you need help signing up on the exchange, seek advice from a designated health care navigator.

Here are some tips to keep in mind as you review your health coverage this year:

Don’t get complacent

You might love the benefits you have at the moment, but that doesn’t mean you should blindly sign up for the same plan next year. Insurers are constantly tweaking existing coverage areas and creating new plans. Check to see if your existing plan has changed and see if there are new plans. With the rapid increase in pharmaceutical and health care prices, it’s important to look beyond the premium alone. Lower-cost plans may have higher out-of-pocket costs like deductibles, co-pays, and co-insurance. Certain covered drugs and treatments or the qualifying doctors or hospitals in your network could have changed as well.

Lower your out-of-pocket expenses with a Flexible Spending Account

Americans are paying the highest out-of-pocket health care expenses in history, due to a shift toward high-deductible plans. You can lower your out-of-pocket expenses by setting aside pretax dollars in a Flexible Spending Account. FSAs are only available to workers whose employer provides them.

FSAs can be used only for certain medical expenses, such as co-pays, prescriptions, and some over-the-counter medications. The maximum contribution is $2,550 for 2016. You can only sign up for one during the open enrollment period. When you do, you’ll decide how much of your pretax salary you want to contribute to cover qualified health care expenses throughout the year. Be careful not to contribute too much, however. The downside of an FSA is that you have to use the money in the account by December 31, or it is returned to your employer. However, some employers offer grace periods.

Take advantage of a Health Savings Account if you have a high-deductible health plan

Health Savings Accounts (HSAs) go with high-deductible plans like salmon and white wine. Like an FSA, you contribute pretax dollars to an HSA to cover your medical expenses. However, since HSAs are not tied to any one employer, they are portable. Your money will come with you from one job to the next, and you won’t be limited on where you can use it. You also don’t have a certain time period to make or change your contribution amount, so you can make changes anytime throughout the year. In order to qualify for an HSA in 2017, your health plan deductible must be higher than $1,300 for an individual and $2,600 for a family.

Learn from last year’s mistakes

This is your chance to find a plan that fits your budget and your needs. Insurance companies change coverage rates and options frequently, so take the opportunity to do your research and flesh out all of your options this enrollment season. If you went for a low-premium, high-deductible plan this year, you might have realized you don’t really like paying higher out-of-pocket expenses all that much. Similarly, if you’ve paid for a high-premium, low-deductible plan but don’t use your health insurance that much, you may join the ranks of the growing number of Americans who have switched over to high-deductible health care plans over the past few years.

Check to see if you qualify for a tax credit

Like 80% of Obamacare applicants, you might be eligible for a tax credit that would lower your monthly premium. The average subsidy granted in 2016 was $3480 ($290/month), according to the U.S. Department of Health and Human Services. If your estimated household income is up to four times the federal poverty level, then you’d qualify for the credit. You can check here to see if you qualify for a subsidy.

If you decide to forego insurance, know what to expect

Under the Affordable Care Act, every American has to have qualifying health insurance coverage, or pay a tax penalty. For 2016, the penalty is $695 for each uninsured adult in the household. However, there are a few exceptions. You might qualify for an exemption from the penalties under certain circumstances. For example, you won’t face a penalty if you suddenly lose a job or you are in between jobs for 1 or 2 months and have a gap in coverage. You should check to see if any exemptions apply to you before skipping out on signing up this enrollment season.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

TAGS: , ,

Advertiser Disclosure

News

FSA vs. HSA: Which Is Right for You?

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Couple Reading Letter In Respect Of Husband's Neck Injury

If you’re in the position of having both a Flexible Spending Account (FSA) and a Health Savings Account (HSA) available to you, you might be wondering which way you should go.

Most consumers don’t totally understand account-based health plans, including HSAs and FSAs, according to a survey by health care and benefit payment firm Alegeus Technologies. Case in point: Only half of FSA holders passed an FSA proficiency quiz, and just 30% of HSA holders passed an HSA proficiency quiz.

If you aren’t sure which account is the best pick — or even what they can do for you — here’s a breakdown of your options.

What’s a Health FSA?

A health Flexible Spending Account is an employer-sponsored medical savings account into which you can contribute pre-tax dollars that you can use toward qualified health care expenses. This generally includes deductibles, copayments and qualified medical expenses that your insurance doesn’t cover, such as prescription medication, contraceptives and orthodontia.

In 2016, you can contribute as much as $2,550 to an FSA.

FSA Pros:

If your employer offers an FSA — and a majority do — signing up during open enrollment (usually in the fall) is easy, and setting aside funds pre-tax lowers your taxable income, which means you pay less in taxes overall.

FSA Cons:

The money you contribute to an FSA must be used by December 31 of the contribution year, unless your employer offers either a grace period (in which case you must use all funds by March 15 of the following year) or a $500 carryover option, in which you can roll over up to $500 in unused funds to the next FSA year. Otherwise, the unused funds are forfeited to your employer.

This means you must be fairly accurate at guessing what your healthcare expenses will be in the future, which isn’t always so easy. And you can only change how much you contribute to your FSA during open enrollment, or after a life change (such as a marriage or birth of a baby) or change in employment.

FSAs are employer-specific. If you change jobs, you’ll generally lose your FSA.

What’s an HSA?

A Health Savings Account is a medical savings account into which you can deposit pre-tax money, available to consumers enrolled in an HSA-qualified high-deductible health plan. Like an FSA, the funds can be put toward out-of-pocket health care expenses.

In 2016, the contribution limits for HSAs are $3,350 for individuals and $6,750 for families.

HSA Pros:

The money you put into an HSA can stay there until you use it — no end-of-year deadline. You can save now and pay for medical costs in 20 years if you wish. To make high-deductible health plans (and accompanying HSAs) more enticing to employees, many employers sweeten the deal by contributing some amount to the HSA annually — an average of $515 per employee in 2014, according to United Benefit Advisors.

You also have the ability to invest the funds in your HSA, ostensibly giving you another way to grow your savings. You won’t be taxed on any earnings or distributions from the account.

You can change your HSA contribution amount at any point during the calendar year. Had an unexpected medical expense? Put pre-tax money into your HSA to cover it.

HSAs are not employer-specific, so you can take your HSA with you even if you change jobs.

HSA Cons:

Not everyone is eligible for an HSA. You must be enrolled in a qualified high-deductible health plan (HDHP), so if you aren’t, an HSA isn’t an option for you.

For 2016, an HDHP would be self-only health insurance with a deductible of $1,300 or more or family health insurance with a deductible of $2,600 or more. To have an HSA, your HDHP would have to be your only plan, you shouldn’t be Medicare-eligible, and you can’t be claimed as a dependent on anyone else’s taxes.

The Bottom Line

So which should you choose? That depends on your circumstances. If you’re eligible for both, an HSA has more advantages in terms of flexibility, the ability to roll it over year after year, and the chance to invest the funds.

If you’re not eligible for an HSA, and your employer offers an FSA, the choice is easy: Sign up for the FSA.

You can’t have both accounts at once unless your employer offers a limited purpose FSA that could be used to pay for out-of-pocket dental and vision expenses. Your benefits department should be able to tell you whether that’s the case.

Kate Ashford |

Kate Ashford is a writer at MagnifyMoney. You can email Kate at kateashford@magnifymoney.com

TAGS: