Comprehensive health insurance plans are the standard approach. Although they have eliminated the need for much coverage formerly introduced as separate plans, dental insurance, vision insurance, and prescription drug coverage’s have, for the most part, continued to be offered as separate plans. In addition, a relatively new coverage, long-term care insurance, is also offered as a separate product.
Dental Insurance Plans
Group dental insurance has been one of the fastest-growing employee benefit plans. A group dental insurance plan provides coverage’s for almost all dental expenses. A unique characteristic of dental insurance is the inclusion of benefits for both routine diagnostic procedures (e.g., oral examinations and X-rays) and preventative dental treatment (e.g., teeth cleaning and fluoride treatment). Benefits may be provided on a scheduled basis, on a nonscheduled basis, or on some combination of the two. A scheduled dental plan provides benefits up to the amount specified in the fee schedule. Most scheduled dental plans provide benefits on a first-dollar basis and contain no deductibles or specified coinsurance percentage. Benefit maximums are often lower than reasonable and customary charges leading to a cost savings by the employer.
Nonscheduled plans, often called comprehensive dental plans, resemble major medical expense contracts because dental expenses are paid on a reasonable and customary basis, subject to any exclusions, limitations, or co-payments in the contract.
They usually include both deductibles and coinsurance provisions, but the provisions may vary for different classes of dental services. The typical plan classifies dental services into broad categories:
• diagnostic services
• basic services (e.g., fillings, oral surgery, periodontics, and endodontics)
• major services (e.g. inlays, crowns, dentures, and orthodontics)
Diagnostic and preventative services are typically not subject to a deductible or coinsurance, The other two categories are generally subject to an annual deductible (e.g., between $50 and $100 per person) and a coinsurance provision (e.g., 50 to 80 percent). The cost of basic services may be reimbursed at a high percentage (e.g., 80 percent) in contrast to major services, which are subject to a lower percentage (often 50 percent). There is also a maximum for benefits payable to any one person.
Vision Care Insurance Plans
Medical expense coverage’s long have covered expenses for diagnosis and treatment of an illness or injury of the eye. Vision care expense plans, on the other hand, provide reimbursement for the cost of eye examinations to determine whether the individual needs glasses and, if so, for the cost of required frames and lenses. Single vision, bifocal, and trifocals lenses usually are covered, as are contact lenses and other aids for subnormal vision. To minimize over utilization, coverage usually is limited to only one examination and one pair of lenses or contacts in any 24 consecutive months. Medical or surgical treatment, sunglasses, safety glasses, and duplication of existing lenses or frames because of breakage or loss are commonly excluded. Dental and vision care plans are really not insurance but prepayment plans.
Long-Term Care Plans
Long-term care (LTC) is a relatively new addition to the insurance industry, and its products are still evolving to meet consumer needs. The growth of group LTC insurance can be described as slow and cautious. Adequate actuarial data needed to design and price coverage has not been available. Also, until recently, the tax status of group LTC coverage has been uncertain. Finally, participation in group plans has been modest because older employees who believe that they need the coverage often found it too expensive. In general, employers have been reluctant to contribute toward the cost of LTC programs. Most of the early group LTC policies were designed for specific large employers, and much variation existed. Today, most insurers have a standard group LTC contract, which in virtually all cases is consistent with the provisions in the NAIC Long-Term Care Insurance Model Act. Group LTC policies tend to be comparable to the broader policies sold in the individual market. The primary purpose of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) was to help ensure that individuals would not lose their medical coverage or be subject to new preexisting condition periods when they changed or lost their jobs. The bill included an increased health insurance premium tax deduction for the self- employed and provisions to reduce fraud and to simplify administrative systems. The bill also included LTC insurance consumer protection standards and provisions clarifying the federal tax treatment of the long-term care policies.