The facts
What are group dental plans?
A dental plan is typically an insurance-based scheme that offers employees cover for various dental treatments, such as check-ups, fillings, crowns and bridges. The benefit can be provided as a fully funded perk, via a private medical insurance scheme or as part of a health cash plan.
What are the origins of group dental plans?
Group dental plans really began to gain traction in the late 1980s and early 1990s. National Dental Plan was the UK’s first corporate dental insurance provider in 1987.
Where can employers get more information and advice?
Further information can be found via the Oral Health Foundation at www.dentalhealth.org.
What are the costs involved?
The cost of group dental plans varies depending on the level of cover needed, as well as the way a plan is funded. Typically, plans that cover NHS treatment can start from between £5 and £7 per person, per month, while plans with a higher range of cover, which includes private dental treatments, can cost between £25 and £40 per person, per month. Family cover can cost approximately £10 per month.
What are the legal and tax implications?
There are no legal implications for employers that wish to offer staff a group dental plan. However, organisations should be aware that dental plans are taxed as a benefit in kind, meaning they are subject to tax and national insurance. Employers are required by law to complete a P11D form.
What is the annual spend?
Figures from LaingBuisson’s Health cover UK market report, published in July 2015, found that the UK market for dental benefit plans was valued at £619 million in 2014. The report also found that dental capitation plans generated an income of £516 million, and dental insurance premiums were worth £103 million, with employer-paid plans accounting for £56 million of this.
Which providers have the biggest market share?
According to LaingBuisson, the largest providers in the market are Bupa, Cigna, Denplan and Unum Dental (previously National Dental Plan), all with a significant share of the market.
Which providers have increased their market share?
No data is currently available on this.
Dental plans first made an appearance in the corporate sphere in the late 1980s. In its Health cover UK market report, published July 2015, LaingBuisson reports that by the end of 2014, 3.25 million people in the UK were covered by dental plans, with the total benefits paid out from dental insurance claims reaching approximately £67 million.
Dental plans are traditionally an insurance-based product that reimburses employees for money spent on dental check-ups and treatments in return for a monthly premium. This can be paid for by the employer, offered as part of a flexible benefits scheme or accessed as a voluntary benefit, for example, through a salary sacrifice arrangement.
Some providers, such as Munroe Sutton and Cigna, now also offer discounted dental cover, where scheme members are issued with an identity card that allows them to gain a 20% discount on treatments issued by a registered network of dentists.
Market data shows that dental benefits are growing in popularity. LaingBuisson, for example, found that spending on dental insurance increased by 21% between 2011-2014. Take-up by employees is also rising; Denplan’s Health and wellbeing benefits survey 2016, published in January 2016, found a 39% take-up rate of dental plans in 2016, which is slightly higher than the 35% take-up rate reported in 2015.
According to Munroe Sutton, health cash plans have helped to widen access to dental benefits, however, rises in insurance premium tax (IPT) could mean employees pay more for their dental cover. Despite this, Munroe Sutton’s Dental benefits report 2016: what UK employees want and how employers can help research, published in July 2016, found that 65% of employees would be prepared to contribute up to £15 per month towards a personal dental plan, and 71% would be prepared to contribute up to £20 per month for a family plan.
Employer-paid dental plans have seen a more marked increase in popularity, with spend growing by 35.5% between 2011 and 2014, to cover 419,000 people, according to LaingBuisson’s report. To put this into context, individual spend only saw an increase of 7% over the same period. Benefits paid to members of employer-funded dental insurance reached £36 million according to LaingBuisson, compared to £32 million paid out on individual- or employee-paid policies.
According to Cigna, the most popular treatments continue to be crowns, bridges and fillings, as well as preventative measures such as scale and polish procedures, and X-rays.
In response to employee demand varying levels of dental plans now feature orthodontic treatment for adults and children, as well as providing cover for teeth whitening and implants. Indeed, 46% of employees value a dental plan more if it includes savings on cosmetic dental care, according to Munroe Sutton’s aforementioned report. As well as this increase in cosmetic procedures, demand for private dentistry has also grown.
The increase in NHS dental charges in April 2016 has led to some providers speculating as to whether this has contributed to higher take-up rates for employer-supported dental schemes. Cost is certainly a factor when it comes to employee engagement; Munroe Sutton’s 2016 research found that 45% of employees would visit the dentist more frequently if they knew they would be able to afford treatment if it was needed, and 57% would attend twice-yearly check-ups if they had help with dental costs.
Denplan’s research also found that 52% of employees would worry less about the cost of dental treatment if their employer arranged a dental plan for them.
There has been a key change in the perception of dental plans; both employers and employees are increasingly realising the role of dental plans in terms of employee wellbeing and engagement. Denplan’s 2015 research found that the main reason employers utilised benefits such as a dental plan was to provide staff with a value-for-money proposition, but this year’s research found that organisations are instead looking for benefits that enhance employee wellbeing above anything else.
Denplan’s 2016 report also shows that among employers that provide staff with a group dental plan, 69% believe this aids recruiting new staff, 73% feel it helps retain existing employees, and 84% think it shows they care about their staff.
Other emerging trends include the use of technology, with providers investigating apps and utilising gamification to aid with employee engagement. According to Cigna, there is also demand for single sign-on and online claims processes from employee plan members.
Meanwhile, collecting data via gamification, for example, via an app that allows employers to see how staff go about brushing their teeth, could help providers personalise group dental plans further, both in terms of cost and also in taking a proactive approach to health and wellbeing.
Changes within the NHS are due to take place in 2016-2017, and include a new preventative-based dental contract and commissioning structure. Although these plans have not yet reached their conclusion, providers are already considering how the potential tweaks could impact group dental plans.