Federal Employees and Retirees Should Review Dental Insurance Choices Annually

Federal employees and retirees are encouraged to review their and their family’s dental insurance needs annually. For both employees and retirees, the federal benefits open season  allows both employees and retirees to enroll, disenroll, or change their dental insurance plan offered through the Federal Employees Dental and Vision Insurance Program (FEDVIP).

Dental and vision insurance benefits are available through the FEDVIP to eligible federal and postal service employees, annuitants, survivor annuitants and to their eligible family members (spouses and children under age 22). FEDVIP offers separate or both dental and vision insurance to be purchased. Dental premiums are paid entirely by employees, annuitants and survivor annuitants with no federal government contributions.

With respect to eligibility to enroll in the FEDVIP, an employee who is eligible to be enrolled in the Federal Employees Health Benefits (FEHB) program) (whether or not they are enrolled) is eligible to enroll in the FEDVIP. Annuitants and survivor annuitants need not be enrolled in the FEHB program in order to enroll in the FEDVIP. Specific information about the FEDVIP including dental plan and vision plan information and enrollment procedures can be obtained at https://www.benefeds.com/.

For those employees, annuitants and survivor annuitants who enroll in the FEDVIP or change their dental plan and/or vision plan during the current “open season,” changes become effective January 1, 2024.

In addition to discussing dental insurance offered through the FEDVIP, this column presents general information about dental insurance. There is no question that dental care is expensive, particularly when an individual needs major dental work to be performed. Employees, annuitants and survivor annuitants in need of dental insurance are therefore advised to choose a dental insurance plan that best meets their needs.

There are two types of dental insurance plans – group dental insurance plans offered to employees from an employer (for example, the FEDVIP), or individually purchased dental insurance plans which an individual purchases on his or her own.

Recommendations for choosing an individual dental insurance plan

The following are some general recommendations for choosing an individual dental insurance plan. One of the main criteria for choosing for choosing a particular dental plan is that if an individual uses a particular dentist, that the dentist is in the insurance plan’s preferred provider organization (PPO) network.

• If the individual uses a particular dentist and the dentist is in an insurance company’s PPO network, then the individual ideally should choose one of the less expensive dental plans.

• If the individual does not use a particular dentist, then the individual should choose a dentist who is in a particular’s PPO network and choose a less expensive plan.

• If the individual’s dentist is not in any insurance plan’s PPO network, then the individual should be prepared to pay more out-of-pocket when using an out-of-network provider.

•If an individual and if applicable, an individual’s family member included in the individua’s dental insurance plan, has a need for an expensive dental procedure (for example, crowns, orthodontics, implants), then the procedure will be covered at least in part by the insurance with no waiting period.

Monthly premiums for individual dental insurance will depend on the dental insurance company, the insured’s location (more expense or less expensive area of the country), and the type of dental insurance plan (fee-for-service, HMO or PPO).

Is individual dental insurance worth the cost?

Like any other insurance, dental insurance is a “transfer of risk” in which the insured pays a relatively small amount of money (premiums) to the insurance company to protect the insured from a financial catastrophe. In short, insurance is designed to protect the insured from a financial catastrophe.

But dental insurance is different in many ways from most other kinds of insurance such as health insurance or homeowner’s insurance. With both health insurance and homeowner’s insurance, the potential downside of not being insured is so high that almost no individual can afford the risk of not being insured. On the other hand, with dental insurance, the potential downside is fairly low as is the potential upside.

Take the example of a family of four. In a good year, family members may only need the standard cleanings, routine exams and x-rays that constitute good and recommended care. The family may pay $500 to $600 out-of-pocket for these preventive services. With dental insurance, the family may pay on average $700 – $750 in dental insurance premiums. This means purchasing dental insurance results in a net loss for the family.

Senior citizens past age 60 may find dental insurance to be worthwhile. Individual dental insurance for senior citizens is similar to plans for other individuals but focuses on the dental coverage that seniors may likely need including crowns, root canals, dentures, and tooth replacements.

Dental insurance restrictions and out-of-pocket costs

With most dental insurance plans, not all expenses incurred will be paid by insurance. Some dental insurance plans have low annual maximum payouts of $1,000 -$1,500 (the amount will vary by plan and insurance company). This means once the insured’s dental bills exceed $1,000 – $1,500, the insured pays in full any remaining dental expenses incurred during the remainder of the year.

There are also coinsurance costs. Some dental plans have the insured pay 0 percent in coinsurance for preventative maintenance and 20 percent coinsurance on fillings, root canals, and extractions. With the expensive dental procedures such as crowns, bridges and implants, coinsurance costs tend to be 50 percent. This means that even if the insured has not used up his or her annual maximum by the time an expensive procedure is needed, the insured may still have to pay several hundred dollars for a particular procedure.

What about employer-sponsored group dental insurance plans such as the FEDVIP?

Many employees whose employers offer a group dental insurance plan are under the impression that they are better off compared to owning an individual dental insurance plan. This is because they are hopefully benefiting from a group insurance premium rate, but this is not necessarily true. And this includes the FEDVIP. Federal employees and annuitants have 12 dental insurance plans to choose from. They are paying the full cost of the premium, with no contribution from the federal government.

When evaluating a FEDVIP dental insurance plan, an employee or a retiree should examine the bi-weekly or monthly premium, the annual maximum, and the coinsurance. They should also make sure that their dentists accept the insurance. An employee or an annuitant may find a particular FEDVIP plan that costs only $20 a month to cover an entire family with a generous annual maximum, or a mediocre plan that costs $50 a month with a $1,000 annual maximum. With the former plan, an employee or retiree can benefit, but with the latter plan, the employee or retiree could be wasting their money.

Finally, as an alternative to purchasing any type of dental insurance (individual plan or through FEDVIP), employees and retirees may want to consider “self-insuring” to pay potential dental expenses. One example of “self-insuring” is for employees to set aside a portion of their gross salary (as much as $3,200 during 2024) to a health care flexible spending account (HCFSA). Employees and retirees who have health savings accounts (HSAs) or permitted to make tax-free withdrawals from their HSAs to pay for qualified expenses including dental expenses.

During this current benefit “open season,” federal employees and retirees are advised to evaluate their and their family dental care needs for 2024. They are encouraged to compare what the FEDVIP has to offer versus individual dental insurance, or the possibility of self-insuring is an alternative to purchasing dental insurance.

Needless to say, brushing and flossing one’s teeth regularly, switching to an inexpensive electric toothbrush, getting professional cleaning every six months, and going to a dentist who performs high-quality dental work that lasts for years can be one of the most effective ways to save money in the long run when it comes to dental care.