Having a well-rounded selection of group benefits is integral for attracting new employees as well as keeping your current team happy, healthy, and loyal. Voluntary benefits are an especially great way to round out your benefits program without significant cost to you, and dental insurance is one of the most popular options.
When browsing the dental plans available, you’ll inevitably run into terms like “indemnity”, “DMO”, and “PDN” (or “dental PPO”). Each of these refers to a different style of insurance plan, each with their own advantages and disadvantages. Below, we will break down the pros and cons of all three plan types as well as giving some basic guidelines when it comes to deciding which option is the best choice for your organization.
- DMO Plans
DMO stands for “dental maintenance organization”. As those familiar with health insurance terminology will have guessed, these are very similar to the health maintenance organization, or HMO, style of health plan. At their simplest, DMO plans offer low premiums and overall costs in exchange for less freedom when it comes to choosing which dentist you see.
Like their HMO counterparts, DMO plans require participants to select a primary care dentist. You will also need to get a referral from that primary dentist before you can see an orthodontist or other specialist. Thanks to the way they are set up, DMO plans also come with a smaller pool of available providers than other plan types. With a DMO plan, an insurer will guarantee this small pool of providers a steady stream of patients and referrals in exchange for lower prices. The fact that patients will need to go through their primary care dentist in order to see a specialist also helps to lower costs by ensuring that expensive specialty care is only performed when medically necessary.
Overall, DMO plans’ primary strength is their low cost, while their primary weakness is their small pool of providers and the extra step needed to see a specialist.
- PDN/Dental PPO Plans
Dental preferred provider organization (PPO) plans, also referred to as participating dental networks (PDNs), are less restrictive than their DMO counterparts. Like PPOs for major medical plans, many dental PPOs will allow you to visit any dentist you want so long as they accept your insurance, with no referral needed to see a specialist. Some dental PPOs have networks, but there is no strict requirement that you only see in-network providers. You will have lower out-of-pocket costs if you do stick to participating providers, but there is still the freedom to go off-network if desired.
Premiums for dental PPO plans are affordable, though not as low as those you would see with a comparable DMO plan. Overall, PPOs serve as a nice middle ground, offering a fair amount of flexibility paired with reasonable costs.
- Indemnity Plans
With an indemnity plan, enrollees can visit any dentist who will accept their insurance, with no need to stick to a specific network or seek out referrals. Even if a given dentist doesn’t accept direct payment from the insurer, the enrollee may still be able to be reimbursed for covered expenses after receiving care.
Indemnity plans impose very few restrictions and offer the greatest degree of flexibility, though they also come with significantly higher prices than the other plan types discussed here.
- The Best Plan for You
As you can see, there are two main factors to consider when choosing which of these plan types is the best fit for your employees: cost and flexibility. Thus, the main question that you will need to ask yourself is how much value your staff will place in low costs versus the ability to choose their own dentist and access specialists.
If you believe your employees would prefer a plan that offers the greatest range of freedom possible, even if that freedom comes with a higher price tag, you will want to look into indemnity plans.
If price is going to be your team’s main concern, you may want to lean more towards a DMO. One thing to keep in mind here is that while DMOs offer low premiums and great prices for common services, their prices for specialty procedures are not as competitive. If your team is looking for a highly affordable plan that will cover common dental procedures at the expense of flexibility, a DMO is a good choice.
If your employees are looking for something in the middle, with a fair degree of flexibility and reasonable prices (especially where uncommon and extensive procedures are concerned) a dental PPO will likely be the best fit.
Adding a dental plan is a great way to make your organization’s benefits package more competitive. When choosing which plan is right for your situation, consider how your employees would prioritize freedom of choice compared to pricing, and how likely they are to need specialty care versus more common procedures.