The UK’s total dental plan market, which covers capitation, dental insurance and dental cover via health cash plans, was estimated to be worth £719 million in 2012, with £95 million of this spent on dental insurance by individuals and employers, according to the Dentistry UK market report – fourth edition 2014, published by healthcare market intelligence organisation Laing and Buisson in April.
The report also found that a strong demand for dental insurance, most notably from employers, drove its share of spending up from 9% in 2007 to 13% in 2012.
Depending on the level of cover, group dental plans typically start at £5 a month per employee, rising to £25 and even higher for a premium plan. When provided to all employees, a plan generally comprises a contribution towards the cost of dental care, especially when included in a health cash plan. It can also be fully funded by an employer, for instance through a private medical insurance (PMI) scheme.
The number of employers offering dental benefits to staff through a flexible benefits scheme has risen since 2009, according to The Benefits research 2014, published by Employee Benefits in May 2014.
This found that while only 8% of respondents offered dental benefits to all staff as a core benefit in 2014, nearly a quarter (24%) provided these on a voluntary basis and 22% through a flexible benefits scheme, up from 21% and 11%, respectively, in 2009.
Regardless of how the benefit is delivered, it is a valued perk, both from the employer’s and the employee’s perspective.
The Denplan dental benefits survey 2014, published by the dental provider in July, found that 32% of employee respondents viewed dental plans as the most important benefit in their employer demonstrating support for their wellbeing. Of the employer respondents that do not provide the benefit to staff, nearly half (46%) were considering adding it in the coming year.
Dental plans are valued by employees because they can be used for routine treatments, such as check-ups and appointments with a dental hygienist, and also provide peace of mind should more complex dental problems arise, covering treatments such as fillings, root canals, crowns and bridges.
Unlike other types of healthcare benefit, there is no pre-joining examination, so pre-existing dental conditions can be covered immediately.
Group dental plans also bring peace of mind for employers, helping to ensure that employees are fit for work. For instance, Denplan’s research found more than two-thirds (68%) of employer respondents said dental plans help them to manage employee sickness absence.
Another advantage for employers is that, if offered through a salary sacrifice arrangement, plans can save national insurance contributions (NICs). And because the benefit is provided under a discounted group rate, it is cheaper for staff than buying dental insurance individually.
However, employers that provide staff with dental plans must report their marginal cost on the P11D and must also pay class 1A NICs.
Trends in dental plans
Cigna HealthCare predicts a growth in employer-paid dental plans of between 5% and 10% a year going forward. One reason for this is the widespread recognition of the fact that good oral health contributes to good overall health.
In fact, maintaining good oral health can reduce medical costs for some of the UK’s most life-threatening illnesses, according to research published by the British Dental Health Foundation in April 2014.
Its study, which looked at almost 350,000 patients with gum disease, found that, after treatment, ongoing costs for those with type 2 diabetes and heart problems decreased by 40% and 11%, respectively.
Pensions auto-enrolment is also having an impact on demand for group dental plans. As costs rise for employers to comply with the pensions legislation, many are seeing the dental perk as a low-cost, high-value option for a new benefit.
Affordability of dental treatments
Another factor driving the growth of group dental plans is concern about the affordability of dental treatments. For instance, providers expect the forthcoming 2014 NHS charges review to result in a rise in charges for NHS dental services.
In the meantime, the NHS offers three levels of charge for dental treatment. The lowest charge is £18.50, which covers an examination, diagnosis and advice. Then there is a charge of £50.50 for all the treatments covered in the first band, as well as fillings, root canal treatments and tooth removal. The highest band is £219, which covers all the previous treatments, plus more complex procedures, such as crowns, dentures and bridges.
Depending on the dental plan provided, employers can help staff slash the costs of these treatments, in some cases through a 100% reimbursement of NHS prices.
Group dental plans are an ideal way for employers to help their staff keep costs low and look after their wider wellbeing.
What are group dental plans?
They are insurance-based schemes that offer employees cover for dental care, such as check-ups and hygienist bills, and treatments, such as fillings, root canals, crowns and bridges. The perks can be accessed as a fully funded benefit, as part of a private medical insurance scheme or part of a health cash plan.
What are their origins?
National Dental Plan was the UK’s first corporate dental insurance provider in 1987.
Where can employers get more information and advice?
From the British Dental Health Foundation at www.dentalhealth.org.
Which providers have the biggest market share?
The corporate dental market has traditionally been split equally between four providers: Bupa, Cigna HealthCare, Denplan and NDP. Other providers include Dencover, Health Shield, Medicash, Munroe Sutton, SimplyHealth and Westfield Health.
What are the costs involved?
The cost of dental plans depends on the level of cover required, the way the scheme is funded and the number of employees covered. Typically, a basic-level plan starts at £5 a month per head, and premium cover starts at £25 a month.
Are there any legal implications?
There are no legal implications around offering dental benefits to staff.
Are there any tax implications?
Dental benefits are classed as a benefit in kind, which means they are subject to tax and national insurance. Employers must also be aware they are required by law to fill in a P11D (expenses and benefits) form.
- Only 8% of respondents offer dental benefits to all staff as a core benefit, while 22% offer the perk through a flexible benefits scheme and 24% offer it to staff on a voluntary basis.
Source: The Benefits Research 2014, published in May 2014.
- Dental insurance ranked second (83%) in the top 20 most commonly offered benefits in flex plans.
Source: Employee Benefits/Towers Watson Flexible benefits research 2014, published in April 2014.
- The UK’s total dental plan market (which covers capitation, dental insurance and dental cover via health cash plans) was estimated to be worth £719 million in 2012, with £95 million of this spent on dental insurance by individuals and employers.
- Strong demand for dental insurance, most notably by employers, has driven its share of spending up from 9% in 2007 to 13% in 2012.
Source: Dentistry UK market report – fourth edition 2014, published by Laing and Buisson in April 2014.
- 32% of employees view dental plans as the most important benefit in demonstrating their employer’s support for their wellbeing.
- 68% of employers said a dental benefit helps to manage employee sickness absence.
Source: The Denplan dental benefits survey 2014, published in July 2014.