Will the national dental plan save me money on my employee benefit plan?
In short – probably not. Not right away anyway. This what we know about the dental plan today.
It will start with those under 12 years old some time in 2022. In 2023 the program will expand to those under 18, seniors and persons living with a disability. By 2025, the program will be fully implemented. The program is income restricted. Families with an income of less than $90,000 will be eligible and only those with an income of less than $70,000 will not pay anything.
Let’s break this down. Here’s what we don’t really know yet.
First – a lot of services fall under dental care. Everything from cleaning your teeth, to fillings, to crowns, to braces. What will the government cover? At the point of writing this, we have no idea. I suspect it will be basic coverage.
Second what does fully implemented mean? Does that mean all Canadians making a family income of less than 90,000? The income threshold seems to be aligned with the median family income in Canada, which is $90,390. Will this amount be adjusted annually to keep up with wage changes in inflation?
Third – How will this program interact with insurance plans? Will more details reveal that the program is only for those without insurance? Will the program coordinate with insurance plans? Will the national dental program pay first, before an insurance plan pays or will it let the insurance plan pay first?
You’re probably thinking, but coverage for 12 years old and younger is starting right away. Won’t that save the employee benefit plan money? It will, but probably not a lot. Here’s why.
About 15% of the total population is aged 0-14 years old. That’s a pretty decent amount of the population. But many of those years’ kids don’t see the dentist. Plus (with the exception of braces) the work kids are having done mostly falls into the basic dental category which costs a lot less than crowns, caps, implants and other major work that happens as we age.
Let’s dig into this income cap that limits coverage eligibility. This is what will exclude most people from qualifying for the plan. The national dental program is only for people who have a family income of $90,000 or less. Key word here is family. A family income includes the incomes of everyone in the family which in most cases is the two adults. In 2015 69% of families had both parents working aka dual income.
In Canada the median family income is $90,390. Median is different from average. Median is the middle – it means that half of Canadian families make more than $90,390 and half make less. Using the median income in Canada to qualify for the plan, means half of Canadas will not be allowed to use the national dental care plan. Of the half that are able to use the plan, many will still have to pay to use the coverage. Only those with a family income of less than $70,000 will not have to pay anything for the plan. Again, we don’t know what will be covered in the plan.
What about coordination? How will the new national dentalcare program interact with insurance plans. We don’t know. With drugs, the system to coordinate with provincial coverage is already set up. For dentalcare a new system will need to be set up for dentists to submit claims to the government plan for reimbursement. Insurance carriers and dental offices will need clarification on the order of payment. In insurance there is something called a first payor. The first payor is the main source of insurance coverage and where the dental office will submit claims first. After the first payor has refunded the dental office for the claim if there is any cost left to pay, and the individual who had the dental services has other coverage that plan may pay for the services. Or if there is no other coverage available then the individual will pay.
No matter what or who the new national dentalcare program covers, employers will save money. But employers should not rush to reduce or remove dental coverage until we know the unknown. With dental costs on the rise, and turnover at an all time high, employers should stay on track with their benefit program updates. Once more is known about the plan, we can make smart decisions on what to change, if anything about the dentalcare portion of the employee benefits plan.
*most of the stats in this article are from Stats Canada. The google machine will find them for you if you ask nicely.