byline: Chris Pyle

Small groups and individuals in Virginia are being forced to buy insurance products that they don’t want or need.  As the definition of small group changes in 2016, groups, brokers and consultants should understand the rules if they are going to make wise decisions regarding health and dental coverage.

Beginning in 2016, the federal Affordable Care Act (ACA) redefines small groups as those having up to 100 employees.  Prior to 2016, the small group definition was 1-50. However, all small groups are not created equal under this federal change. 

Groups with 50 or fewer employees are free to offer or not offer benefits to their employees without fear of fines.  Groups with 51-100 employees are not only required to offer benefits to employees as part of the ACA’s shared responsibility provisions (commonly known as the employer mandate), but since they will be defined as small groups for purposes of the ACA, they will have fewer plan options. 

Why will these small groups have more limited choice? Because, while the federal ACA does not require individuals or groups to purchase specific benefits (but will bestow a tax penalty if you don’t have minimum essential coverage), it forces carriers to include certain benefits as part of plans offered in small group and individual markets. 

It’s as if the government said to an individual, you are not required to purchase a car with an infant car seat, but then the government turns around and tells all car manufacturers, “You must include a car seat in every car sold to an individual.”  You don’t have to buy it, you just can’t not buy it.  You have to buy the car seat whether you need it or not.

From the small group and individual insurance market perspectives, there are 10 car seats — called “essential health benefits.”  Half of one of those 10 car seats is pediatric dental benefits, and these benefits are treated differently from the rest — something that needs to be understood by these newly defined small groups with up to 100 employees.   

If your group is lucky enough to be headquartered in Virginia (and a handful of other states), the rules are a bit friendlier when it comes to dental benefits.

In 2014, the Virginia General Assembly passed legislation clarifying that a carrier offering plans in the small group or individual market is allowed to offer health plans without pediatric dental benefits so long as two conditions are met: First, there must be a qualified dental plan available for purchase and, second, the carrier must disclose that the pediatric dental benefits are not included in the health plan. 

Since carriers are offering exchange-certified dental plans both on and off of the exchanges in Virginia, groups and individuals are free to shop for their dental benefits the way they always have. This applies to all small groups, those that aren’t required to purchase any benefits for employees (under 50) and those that must offer benefits (51-100).

Great news, right?  Maybe not.  As it turns out, almost all carriers are forcing small groups to include pediatric dental benefits in their health plans despite the fact that the carrier is not required to do so and small groups may already have a dental plan they like.  Just like the car seat analogy, you don’t have to buy it, you just can’t not buy it.

In some cases, the resulting pediatric dental portion of the health plan premium is small since the dental benefits are subject to the medical deductible.  Groups opting for these types of plans should most certainly purchase a separate standalone dental plan. Otherwise, employees may take a child to the dentist believing they are covered only to find that they are on the hook for 100 percent of the bill since they have not met a huge medical deductible.

Other plans are charging a bit more premium to provide what looks like a traditional dental benefit. Buyer beware. Groups, brokers and consultants should review these plans carefully.  Often, even when diagnostic and preventive dental services such as exams and cleanings are covered without having to meet the medical deductible, the other categories of benefits such as basic (have you ever heard of a child needing a filling?) and major services are subject to the medical deductible.

Additionally, any orthodontia benefit must meet strict medical necessity criteria.  Furthermore, the coverage levels are not as high as a typical 100/80/50 dental plan. They often look more like a 90/60/50 plan and, in reality, play-out more like a 90/0/0 plan. And keep in mind this all assumes the employee is staying in-network.

Groups and brokers considering one of these plans should do the math. Estimating the costs of treating a child who visits the dentist twice in a year and receives some pretty common procedures such as cleanings, X-rays, fluoride, sealants, a couple fillings and a pulled tooth reveals that the employee in a plan where the dental is subject to the medical deductible would owe 100 percent of the $746 bill (assuming the high medical deductible had not been met).

The employee in an embedded medical plan covering diagnostic and preventive dental services would owe $407. An employee in a traditional standalone dental plan would owe $140. Even taking into consideration the difference in the costs of premium, the employee is better off in a traditional standalone dental plan. 

It’s unfortunate that big health insurance companies are forcing small groups and individuals to buy something that they don’t want or need.

Perhaps as groups and brokers understand what is and is not required market pressure will be applied and the result will be consumers having the freedom to shop for what they want and need. In the meantime, many groups and individuals will be left with having to purchase duplicative coverage in some cases and will be paying more premium than necessary.

Delta Dental of Virginia has responded to this situation by providing flexibility to small groups, allowing them to tweak benefits by removing diagnostic and preventive services from their plans or adjusting other levels of coverage.  None of this is necessary from a legal and regulatory perspective, however.  Carriers are free to offer plans without pediatric dental. Groups with fewer than 50 employees can purchase any dental plan or no dental plan and are not forced to provide any health benefits at all.

However, the new “small” groups of 51-100 must provide health benefits but are allowed to purchase dental plans separate from their health plan.  Brokers and consultants should understand that.

Chris Pyle is vice president, marketing and government relations, for Delta Dental of Virginia.

Before making major changes to small group health plans, agents and brokers should take note of a new Virginia law.  If you’ve sold or renewed a plan in 2014 for groups with 50 or fewer employees, you’ve likely run into a situation where the health carrier required the group to cover pediatric dental benefits as part of the health plan unless the group could attest to having an exchange-certified, stand-alone dental plan. This will no longer be necessary in 2015. 

Bills recently passed by the Virginia General Assembly, HB33 and SB484, clarify that a carrier offering plans in the small group or individual markets is allowed to offer health plans without pediatric dental benefits as long as two conditions are met: First, there has to be a qualified dental plan available to the small group or individual and, second, the carrier must disclose that the pediatric dental benefits are not included in its health plan. 

Simple.  Since carriers are offering exchange-certified dental plans both on and off of the exchanges in Virginia, beginning in 2015, groups and individuals once again will be free to shop for their medical and dental benefits the way they always have.

One of the unintended consequences of health-care reform was that employers with 50 and fewer employees and people who shopped for insurance on their own effectively were required to purchase pediatric dental coverage as part of their medical plan whether or not the purchaser had children and whether or not shoppers already had a family plan with the dentist and plan design they preferred. 

How did this strange rule come to be?  With the launch of insurance exchanges, people have access to two distinct marketplaces in which to shop for coverage.  However, there are significant differences in the rules between the on- and off-exchange markets. 

Inside the exchange, people can purchase all of the required “Essential Health Benefits,” but they can choose not to purchase the pediatric dental benefit.  The mere presence of a stand-alone dental carrier option on an exchange relieves medical carriers of the obligation to provide dental coverage for kids and relieves childless adults of the responsibility to purchase pediatric dental coverage.  This makes sense. Nearly everyone with dental coverage gets that coverage separately from their medical plan.

Outside the exchange, individuals and small employers effectively were required to purchase pediatric dental coverage as part of their larger health insurance plan. This inequitable situation led to several negative consequences, which are true for 2014, but, in Virginia, go away in 2015 and beyond thanks to the legislature.

First, in 2014, medical carriers could imbed pediatric dental coverage into their medical plans for individual and small employers and require that a large medical deductible be met before any dental benefits are paid. In such a scenario, parents would take their kids to what they thought was a covered dentist appointment only to discover that they had failed to meet their medical deductible. 

Second, medical carriers were essentially forced to sell pediatric dental coverage to adults who had no children.

Third, with children covered by a medical plan, parents might have been tempted to drop their children from the family’s current dental plan only to discover that their child’s dentist was no longer in-network.  

Fourth, based on a recent statewide survey, nearly half of Virginians (48 percent) said they would be at least somewhat likely to drop their own dental coverage if their children were covered through their medical plan.  Having fewer adults with dental coverage was certainly not the intention of health-care reform. 

It appears clear that the unintended consequences of health-care reform will not be fixed in Washington, DC.  Thankfully, in this one area, states are in a position to make a difference, and the Virginia General Assembly had the foresight to do just that. 

2014

Health plans sold to groups with fewer than 50 employees and to individuals must include pediatric dental benefits in the health plan UNLESS the carrier is “reasonably assured” that the applicant already has enrolled in an exchange-certified dental plan.

• Regardless of whether the applicant has children
• Regardless of whether the applicant’s children already are covered by another dental plan that is not “exchange- certified.”
• The dental benefits may be subject to the medical deductible.

2015 and beyond

Health plans sold to groups with fewer than 50 employees and to individuals do NOT have to include pediatric dental benefits so long as:

1. There is an exchange-certified dental plan available to the applicant, and
2. The health plan discloses that pediatric dental benefits are not included in the plan.

Chris Pyle is vice president, marketing and government relations at Delta Dental of Virginia.