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Rollover options take dental plans into the consumer-driven arena


In response to the growing consumer-driven health care movement, dental plans have begun offering "rollover" options that allow plan members to carry forward a portion of their unused benefits to subsequent years.

The plans assert the new rollover options are intended both to encourage plan members to be more careful about how they spend their benefit dollars, and to seek preventive treatment, because, in most cases, at least one annual cleaning and exam is required to qualify for a rollover.

However, the plans don't really save employers money on dental benefits because they usually cost a few dollars more than traditional dental plans. In addition, some dental benefits experts worry that these new rollover plans may actually discourage plan members from seeking necessary dental work. They also say rollover plans discriminate against plan members who need the most dental work.

"It's the beginning of the consumer-driven movement for dental," said Jim Fuhrman, executive vp of sales at Spectera UnitedHealthcare Dental, which introduced its Max Multiplier in January.

Like a CDHP for medical care, "it establishes an account at the member level," said Mr. Fuhrman, who is based in Agoura Hills, Calif.

However, unlike a health savings account linked to a CDHP, the entire balance remaining at year-end is not transferred into the next year. Rather, if a plan member's claims do not exceed a specified dollar amount--usually $500--only a portion of the unused amount is rolled over.

In the case of UnitedHealth, for example, "if you have a $1,000 annual maximum benefit and your claims do not exceed $500, your award would be $250, so the subsequent year's maximum benefit would be $1,250," Mr. Fuhrman said.

In addition "if all of those services were in-network, there would be an additional bonus of $100. So the maximum next year would be $1,350," he said.

Total rollovers in UnitedHealth's $1,000 annual maximum benefit plan are capped at $1,000.

New York-based Guardian Life Insurance of America's Maximum Rollover plan and Portland, Ore.-based Standard Insurance Co.'s Maxbuilder are structured similarly, with minor differences in amounts rolled over and benefit maximums. Maxbuilder, though, mandates that members receive preventive care in the second year, or lose the money rolled over from the previous year.

CIGNA Dental's Wellness Plus plan, introduced Jan. 1, "is designed to encourage prevention unlike other plans that typically reward plan members for doing less," according to Bebe Shuler-Mure, assistant vp of product development based in Sunrise, Fla.

CIGNA Dental decided to begin offering Wellness Plus after examining market trends to find a way to make dental insurance more meaningful, Ms. Shuler-Mure said.

"Let's face it, dental hasn't changed in 30 years," she said.

However, it was necessary for the benefit to change to respond "to studies that link dental health to medical health," she said (BI, Nov. 13, 2006; Dec. 27, 2004). "We're literally putting our money where our mouth is."

"The American Dental Hygienists Assn. estimates that every $1 spent on prevention saves between $8 and $50 in restorative dental costs," she said. "There's also lost productivity, downtime, etc. If you get a cleaning, it's 20 minutes. A crown takes hours and hours."

Although the dental rollover plan is similar to CDHPs in that "they encourage preventive care and encourage consumers to participate in health care purchasing decisions," they don't really control employer dental plan costs, said Gary Shores, dental product manager at Portland, Ore.-based Standard Insurance Co., which introduced its Maxbuilder rollover plan in February 2004.

In fact, most rollover plans cost employers between 1% and 5% more than traditional plans, particularly in later years as the benefits grow, according Marv Zatz, lead dental consultant at Towers Perrin in Parsippany, N.J.

For example, while the first-year cost of CIGNA Dental's plan is relatively neutral compared with traditional plans, second-year costs may be 1% more, depending on the group's experience. Cost increases usually level out around the third or fourth year, Ms. Shuler-Mure said.

"It's not a cost-saving design feature for employers," said Ray Brusca, vp of benefits at Black & Decker Corp. in Towson, Md.

Still, he said his company will begin offering a rollover plan from CIGNA Dental next year "to try and get more people into the dentist so they don't develop conditions that lead to large out-of-pocket dental expenses."

In reviewing the dental claims of Black & Decker's covered population, Mr. Brusca said he found that between 35% and 40% were not getting regular annual checkups.

Besides costing employers more, dental rollover plans also may "discriminate against people who need a lot of dental care," said Mr. Zatz. "This gives benefits to those folks who need it the least."

He pointed out that, statistically, only 5% to 6% of members enrolled in a plan with $1,500 in annual limit ever exceed the cap.

"It also could be a disincentive and cause members to delay needed dentistry to get the rollover," Mr. Zatz added. "Will people wait and defer dentistry in the hopes of not meeting the threshold and then the following year, they'll have some additional rollover money and they'll do the dentistry they should do in 2006 in 2007 or do it in 2008?"

Since part of the appeal of rollovers is that they allow for higher benefit maximums, which for many groups have failed to keep pace with inflation, Mr. Zatz recommends that employers simply raise the caps rather than buy a rollover plan.

Delta Dental of California, for example, is developing a rollover alternative that would waive the maximum benefit limit for plan members who have been getting regular preventive care services but occasionally need extensive restorative work, according to Jeff Album, the insurer's director of public and government affairs in San Francisco.

The San Francisco, Calif.-based member of Delta Dental Plans Assn. also is considering excluding diagnostic and preventive work from the annual maximum, covering it at 100%, Mr. Album said.

"What's changed in the dental coverage industry" is that many services that had been excluded are now included, such as implants and sealants and orthodontics for adults," Mr. Zatz said. "But the annual maximums have held fairly steady. At the same time, the cost of services has increased."

"I think you'll find that these rollover plans will stay because they have cachet to them," he said. "It's like a cell phone plan. If you don't use the minutes, you can roll them over. That sounds good."

"But it's not quite that simple. You can only roll over a part of it. You can only roll it over if you have a particular type of visit with most of these. So there are a number of restrictions. And it's not indefinite," Mr. Zatz said.