As benefit brokers and advisers gear up for another open-enrollment season, they might want to consider a unique product pairing that can help reduce costs for employers, as well as ease employee fears about their out-of-pocket costs rising in a difficult economic climate.
The Guardian Life Insurance Company of America now offers employees the flexibility to choose among two dental plans with different benefits that are offered at a single, blended rate. One enticement for employers to offer this design is a 6% renewal rate cap on the first renewal at no additional cost through January 1, 2010 effective dates (renewal caps are not available in some states). The deal may be particularly appealing given the growing emphasis on rate stability.
Chris Swanker, Guardian’s vice president of group dental and vision, describes the arrangement, marketed under the Guardian Choice brand, as “the best transition plan on the market because oftentimes brokers, advisers and plan holders may be reluctant to move from a very passive plan design to something that purposely creates higher network utilization, for fear of employee disruption.”
In vs. out of network
Guardian Choice, which pairs a Network Access Plan (NAP) and Value Plan (often referred to as a Maximum Allowable Charge plan) can be customized to the smallest case size and highlights the value of Guardian’s extensive network, which features more than 75,000 unique providers in more than 120,000 locations who agree to discount fees up to 30% compared to what dentists normally charge.
The NAP offering is designed to mimic an inforce passive plan design, which typically includes the same in and out-of-network co-insurance and out of network reimbursement capped at usual charge levels for the area. The NAP option provides flexibility for those employees that want to minimize out-of-pocket costs, should they decide to seek treatment from an out of network provider. Thus, it is particularly appealing for those who insist on continuing treatment with a dentist who isn’t part of Guardian’s network of preferred providers.
Also available in the offering is a Value Plan, which provides greater co-insurance than the NAP plan both in and out of network, but out-of-network reimbursements are limited to the level of in-network reimbursement. Employees who elect the Value Plan are choosing increased benefits if treatment is performed by an in network dentist, with the potential for greater out of pocket should they go out of network. Additionally, employers looking to reduce long-term claims cost and renewal increases should benefit from the additional in-network utilization created by this arrangement.
Of course, even with a NAP plan there’s a clear advantage to selecting a network provider, whose fees are discounted – enabling members to stretch their benefit dollars and plan maximums. And if an individual’s dentist happens to already be in the network, then it would make sense for the employee to sign up for the Value Plan in order to receive increased benefits.
The single blended rate is convenient for plan administrator that need not keep track of two different premium levels and payroll deduction amounts. “It also supports the concept of employee engagement and consumer choice within benefit plans because employees can choose between two different styles of benefits at the same price point,” he explains.
More freedom for members
Co-insurance pairings within these Guardian Choice plans vary. The most popular NAP is the 100/80/50 arrangement for preventive, basic and major services with a $1,000 annual benefits maximum. It matches the plain-vanilla plans that have been in place for many years, regardless of whether the source of care is in or out of network, and caps Value Plan reimbursement at the in-network level with greater co-insurance (e.g., 100/100/60).
“What makes it work so well is you’re giving employees the opportunity to choose between two distinctly different benefit plans that are similar in value at the same price point,” Swanker explains. “They can essentially decide whether to commit to an in-network dentist and receive enhanced benefits or remain at the standard level of benefits and have the freedom of choice to go in or out of network.”
By moving the decision-making point from the time someone is ready to visit the dentist to the annual enrollment process, Guardian is seeing more people elect and utilize in-network benefits. Anywhere from 50% to 60% of employee populations are choosing greater benefits with the realization that seeking an in-network provider will help them leverage their benefits.
Still, the financing options haven’t changed, with roughly two-thirds of Guardian’s dental plan sales involving a full or partial employer subsidy and the remainder offered on a voluntary basis – a vehicle that Swanker believes will become increasingly popular as more employers offer greater freedom of choice at the same price point.
About the author |
 |
The Guardian Life Insurance |
