Why does self-funding make sense when providing dental benefits?

• The employer can customize the plan to fit the needs of the work force as opposed to purchasing a "one-size-fits-all" insurance policy.
  
  
• The employer does not have to pre-pay for coverage, thereby providing for improved cash flow.
  
  
• Unlike medical risk, dental risk is highly predictable and is completely free of catastrophic loss. Therefore, estimating the funding costs can be done with a high degree of confidence.
  
  
• With a self-funded plan, an employer reduces or eliminates administrative expenses such as premium taxes and carrier fees.
  
  
• The cost savings experienced from moving from a fully insured to a self-funded dental plan can be up to 20%.
  
  
• Stop-loss coverage can be utilized to insure that the total cost of the plan will not exceed the maximum dollars set aside by the employer.
  

While medical plans have seen significant annual rate increases, dental costs have remained steady and typically represent approximately 10% or less of health care costs. And unlike conventional insured programs where the employer's premium rate frequently is determined by the pooled experience of many groups, the employer's expense for a "DR" program is based only on its own employee's experience.

Flouride, sealants and other preventative care has dramatically improved oral health. Because most dental needs are predictable, non-catastrophic, low-cost and low-risk, dental plans are ideal for self-funding.