Most companies know that when considering dental plans, employees want affordable premiums, a broad array of covered services, minimum out-of-pocket expense and a large network of dentists to choose from. This is not an easy bill to fill, but Dental Health Maintenance Organizations (DHMOs) and Preferred Provider Organizations (PPOs) meet a lot of these criteria.
When deciding which plan suits their needs best, individuals should carefully compare a DHMO vs. PPO. Here’s what you and your colleagues need to know if your organization offers both plan options.
What Is a DHMO?
For starters, employees who opt for a DHMO must enroll in a primary dental office. These participating dentists receive a fixed monthly payment from the insurance company to cover the services they provide for those enrolled in their office.
Most preventive and basic services are done at low or no cost, and other services are discounted. Because there are no insurance forms or payments issued from the insurance company, members are required to cover copays at the time of service. Accordingly, it’s a good idea for organizations to give employees a comprehensive list of no-cost services and a schedule of copay amounts for other treatments.
Members are able to change primary dentists, but they have to go through member services before making an appointment at the new office. When switching providers, they should ask how long the average wait is for appointments and how emergency services are handled, especially when out of the area.
Finally, members who need to see a specialist (such as an endodontist, periodontist or oral surgeon) will need a referral from their primary dentist. Afterward, they can choose a specialist who participates in the program.
What Is a PPO?
A PPO is similar to a traditional fee-for-service plan except that a PPO utilizes a network of dentists who have contracted with the insurance company to accept a lower fee for their services. Employees can go to any dentist they choose, but if they go to a network provider, they will have less out-of-pocket expense.
For example, a participating dentist may normally charge $100 for a cleaning, but under the program, they have agreed to accept $75 from the insurance company. If this is a benefit paid out at 100 percent, the dentist will receive $75 and the employee will owe nothing. If the employee had the same cleaning done by a nonparticipating dentist, who also charged $100, the insurance company would pay $75 to the dentist and the employee would owe $25.
Some PPO plans will pay out a lower percentage if the dentist is not in the network. Basic services, for instance, may be payable at 80 percent when done in network but only at 50 percent if the dentist is out of network. Because of the higher non-network expense, employees have a greater incentive to find a participating provider.
DHMO vs. PPO: Pros and Cons
DHMOs have the lowest premiums and there are no deductibles, waiting periods, yearly maximums or claim forms to worry about. All providers are credentialed by the insurance company and are subject to professional oversight. One con is that even though many offerings are discounted, the employee is responsible for copays on most services other than preventive care. However, they will know the cost before the services are done.
PPOs have deductibles, waiting periods and yearly maximums—but with the savings gained by using a participating provider, members typically have coverage for more services within a calendar year. And while the premium is a bit higher than a DHMO, employees are afforded more flexibility in selecting dentists and participating providers automatically submit the claims to the insurance company.
When it comes to DHMO vs. PPO, both plans minimize cost while providing desirable benefits. So, if you are considering either of these types of plans as options at your organization, consider using a Dental Plan Navigator to inform your decision.
Looking for other ways to better support and engage your fellow employees? Check out the Employer Toolkit hosted on United Concordia Dental’s website.