As the economy continues to recover, the labor market is getting extremely tight in some industries. Employers nationwide are looking for ways to attract and retain talent and differentiate themselves from competing employers. For many, that means expanding the quantity and quality of their employee benefits. After all, a 2015 survey from Career Builder found that 55 percent of employees believed an employer’s menu of benefits was more important than salary when considering a job position or offer. And among the most in-demand benefit packages are employee dental and vision plans.
Background
For many years, dental and vision plans were employer-paid. They were just part of a standard package available to full-time workers at little or no cost to themselves. However, as businesses have tightened their belts, many of them moved dental and vision plans to the voluntary benefits side of the ledger, with employees picking up some or all of the premium costs via payroll deduction.
Even when workers are covering the costs, dental and vision plans are overwhelmingly popular with workers, because of the relatively low out of pocket premiums and the terrific value they provide.
Appeal to Workers
Employees like vision and dental benefits because unlike major medical, life insurance and disability insurance benefits, which can go many years before the benefit is actually used, dental and vision benefits provide real savings that employees and their families are able to see every year — because they actually use the plans.
According to the 2016 MetLife Employee Benefit Trends Survey, 68 percent of employees consider dental insurance and 49 percent consider vision benefits to be among their “must have” benefits.
Their employers like them because they can provide this benefit, cementing the bond of loyalty between the employer and employee, for a small fraction of the overall compensation budget. Indeed, dental premiums have been falling in recent years.
Appeal to EmployersÂ
Employers are also embracing dental and vision care as research is increasingly pointing to good dental and vision health as correlated to overall health – hopefully improving worker productivity and reducing eventual health care costs.
For example, diabetes and high blood pressure are increasingly being discovered during routine eye exams. Optometrists across the country are commonly finding early warning signs of hypertension from observing ocular pressure – a nearly invisible symptom outside of eye exams. Their patients armed with this knowledge are able to seek intervention before their condition worsens and results in bigger claims against the employer health plan.
- Consider: 34 percent of all diabetes cases are first identified via eye exams, at a savings of $3,120 per employee
- 39 percent of all hypertension cases are first identified via eye exams, at an average savings of $2,233 per employee
- 62 percent of high cholesterol cases are first identified through eye exams – saving $1,360 in eventual health care costs thanks to early detection
Finally, simply offering something like a vision plan – especially to workers who are at high risk of eye strain from staring at a computer for hours every day – sends an important message to workers that you care about their wellness.
Who Pays Premiums?
According to the National Association of Dental Plans, only six percent of employers are currently paying the entire cost of employee dental benefits. At 24 percent of employers, the employee pays 100 percent of the cost via a payroll deduction program. The great majority of employers – 70 percent of them – employ a shared cost model.
Plan Structures
Furthermore, about 80 percent of group dental plans are preferred provider organizations, or PPOs, which aim to control costs by contracting with a limited network of providers willing to cut their rates to plan members in exchange for the promise of a steady stream of plan referrals. The percentage of plans embracing the PPO model has been increasing, while dental HMOs (DHMOs) and old-fashioned indemnity plans have been losing market share.
Alan Wang is the President of UBF and serves as the lead consultant. He has delivered the UBF solution set throughout the world and is highly regarded for his areas of expertise. You can follow him on Twitter @UBFconsulting.