The wisdom of cover

Few products can boast the sort of growth dental plans have seen over the last couple of years. Figures from Laing & Buisson show there was a 30 per cent rise in terms of subscribers and premium in the company-paid dental cover market in 2006.

Future statistics are likely to show even more growth. “Over the year to April 2007 we saw an increase of 44 per cent in the number of employees on our corporate dental plan,” says Charlie MacEwan, head of communications at WPA, adding that this was without actively promoting the product.

Denplan, which with its dental focus has certainly been promoting its plans, saw even higher growth. Over the course of 2007, it recorded an increase of 154 per cent in the number of employees covered through its plans. “This increase was triggered by the new NHS dental contracts,” says Pam Whelan, corporate dental sales manager at Denplan. “These came into effect in April 2006 and while we started to see an increase in individual sales from that point, it took between six and 12 months for this to come through in the corporate market.”

As a result of the new contract, around 1,500 NHS dentists came out of the NHS according to the British Dental Association, making it much harder to find an NHS dentist. Subsequently, the news has been filled with tales of hundreds of people queuing for places with NHS dentists and people even resorting to DIY dentistry and using pliers to take out their own teeth.

Whelan believes that employers are responding to employee demand for cover. “People are finding it difficult to find an NHS dentist or are finding themselves paying a lot more to have private treatment,” she explains. “Faced with this they’re looking to their employer to adjust benefits packages accordingly.”

From an employer’s perspective this makes it a very valuable benefit to introduce. It meets employee demand and because dental check-ups are recommended at least once a year, they’ll get to use and appreciate it.

It’s also extremely straightforward to implement as Kirsty Jagielko, group product manager healthcare benefits at Cigna Healthcare, explains: “There’s no medical underwriting. All we need is a list of who will be covered and we can set up the scheme.”

Premiums are a flat rate for each employee although some insurers, for instance Cigna Healthcare, will also vary the cost according to the number of employees covered.

Demand is likely to stay high, with further fallout expected in NHS dentistry. In April 2009 the ringfencing will be removed from dentistry funding so it will have to compete with other health services for money from the PCTs. “At this point dentists will also have to renegotiate their contracts with their PCTs,” says Whelan. “This will be an opportunity for them to re-evaluate their position and we’re likely to see a second wave of dentists coming out of the NHS.”

But, in spite of the changes in NHS dentistry and the massive demand for corporate dental schemes, there hasn’t really been a flurry of product development activity.

Denplan has extended its product range, bringing out Denplan Essential Plus and Denplan Extensive Plus to meet the requirements of the growing number of people having to go private for their dentistry.

Dental cover is also becoming more common as a bolt-on to medical insurance. This is the case with Standard Life Healthcare’s Business Choice product, where a dental insurance module can be bought alongside medical insurance or as a stand-alone product. Axa PPP healthcare, Denplan’s sister company, is also looking at a similar venture for its SME products.

WPA also offers it as an option on its medical insurance. “Large corporates can include any benefits they’d like, including dental, while at the smaller end of the market it’s a module on our Enterprise Flexible Benefits plan. One in five of the companies we provide medical insurance to has chosen to include it,” explains MacEwan.

But while there are several ways to access dental cover, Glen Smith, managing director of intermediaries Healthcare Partners, believes more innovation would benefit the market. “There are too few players in the market. If someone could put together a dental insurance scheme that included benefits to cover employer obligations, for instance an eye test and an employee assistance programme, then I think they would be very successful.”

The providers argue that there is already sufficient choice, with plenty of levels of cover available on the indemnity products. “Our plans start at £3 per employee per month for accident and emergency and go up to £20 a month for our comprehensive Diamond scheme,” explains Jagielko. “Although there is the accident and emergency option we do find that most people go for higher levels of cover.”

This choice helps to match employers’ budgets but also the wide range of dental charges, especially with costs varying countrywide and some employees still able to access NHS dentistry.

Jagielko says that the benefit levels on dental make it a common inclusion on flexible benefits schemes, adding that this has been one of the areas of growth over the last year. “An employer might want to put accident and emergency cover in as the core benefit, allowing employees to increase their cover if required,” she explains.

Cash plans are another option for dental cover, with providers arguing that their product offers more flexibility than insurance cover as well as a range of additional benefits. “For £6 a week you get just under £200 of dental benefit at 100 per cent reimbursement,” says Jill Davies, deputy chief executive at Westfield Health. “You can choose how you spend this and, if your dentist diagnoses anything that might need further treatment, it might be covered by additional benefits such as consultation and day surgery.”

Cash plans also pick up some costs that aren’t met by dental insurance. “The only things we don’t cover are the sundries such as dental floss and toothpaste they sell in a dental surgery,” explains Stephen Duff, sales and marketing director at HSF. “We’re happy to cover cosmetic treatments such as tooth whitening and the laboratory fees for making crowns, dentures and so on. These are usually excluded on insurance schemes.”

Regardless of the type of scheme, the providers are keen to work with advisers looking to sell their products. Many, including Denplan and Westfield Health, have in-house and field-based consultants to help intermediaries sell their products. “We have a field-based support team that can provide training on any area of cash plans, including the dental element,” explains Davies. “We also offer online quotations and the ability to flex the benefits within a cash plan to suit a company’s requirements, which can help an intermediary win a sale.”

Commission is also available. Typically, an adviser can expect initial commission of 10 per cent followed by renewal commission at between 5 and 10 per cent. And, although a 25 employee scheme at £10 a month isn’t going to bag a holiday home in the Caribbean, selling it as an add-on to other benefits can help safeguard the business from other intermediaries as well as providing a benefit that employees and employers will use and appreciate.

NHS dentistry – The facts extracted

These are some recent statistics and research findings that demonstrate the problems people are having accessing dentistry.