10 Essential Facts About the Affordable Care Act, Dental and Vision Benefits

The Affordable Care Act (ACA) is changing health care coverage. The goal of health care reform is to extend affordable benefits to Americans who may not have had the opportunity to purchase them in the past. This mainly includes individuals who are self-employed or work for small employers with fewer than 50 employees.

Health care reform’s complexity makes it difficult for employers to understand the decisions they need to make. Here are 10 essential facts about the ACA and dental and vision benefits.

  1. Dental and vision requirements. Dental and vision benefits sold in stand-alone policies are not subject to most ACA provisions. Only pediatric dental and vision benefits are part of Essential Health Benefit Packages (EHBPs), which are required to be offered to individuals and small employers.
  2. Employers can keep current benefits. Employers are not required to purchase any health coverage for employees and their dependents through a health insurance exchange. Employers may keep their current medical, dental and vision benefits with the same insurance carriers.
    • Today, 98 percent of dental benefits are provided through stand-alone dental policies for individuals or families, independent of a medical plan. Employers may continue to offer dental and vision benefits through stand-alone plans offered by insurance carriers.
    • Small employers offering coverage through an exchange may only offer one plan in 2014. There are no other choices for employees.
    • Employers with 50 or more employees must offer Minimum Essential Coverage that is affordable and meaningful or pay a fine. But this does not include dental or vision.
  3. Understand changes with Essential Health Benefits. Essential Health Benefits (EHBs) feature 10 categories of health care services, including pediatric oral and vision care. EHBs must be offered to individuals and small groups both inside and outside the marketplace exchanges.
    • Adults who purchase pediatric dental and vision coverage for dependents also need adult dental and vision coverage to maintain their own health.
    • Pediatric dental and vision benefits are required offers for state insurance exchanges and for small employers with non-grandfathered medical plans outside the exchanges.
    • Medical coverage offered within an exchange must include a pediatric dental benefit, unless the same exchange offers a stand-alone dental plan providing the required pediatric dental benefit. In that case, the medical plan has the option to exclude the benefit.
    • When the pediatric dental benefit is offered in an exchange on a stand-alone basis, employers and individuals are not required to purchase it (by federal law, but a few states may say otherwise).
    • Traditional orthodontia coverage may not be available in essential pediatric dental benefits in state exchanges or EHBPs. Currently only orthodontia declared medically necessary will be covered through an exchange or EHBP. Children undergoing an orthodontia treatment program that extends beyond 2013 may be impacted significantly, as their care will be covered through the exchange. Some exchanges may offer additional wrap-around options with pediatric orthodontia coverage, but benefits and providers may be different from existing plans.
    • At this time, medical plans in all states must include pediatric vision benefits in and out of the exchanges in the small group market.
  4. Penalty for no health coverage. If individual consumers choose not to purchase health benefits, they may be assessed a small penalty. It is not clear whether that extends to the purchase of pediatric oral or vision benefits in the small group market.
  5. Dental and vision coverage changes. In an exchange marketplace, medical plans with dental or vision coverage might cover only children. If so, adults will need to purchase separate dental and vision plans.
    • Individuals purchasing individual or small-group coverage, either in or outside an exchange, may have to change dentists if their current one does not participate in the plan. Services from a dentist not in a particular exchange plan’s network will not be subject to a limit on the amount of out-of-pocket costs an insured pediatric member is required to assume.
    • Adults and dependents purchasing dental or vision through an exchange or EHBP may have different benefit plans.
  6.  Dental and vision embedded in a medical plan may not meet expectations. A medical plan offering dental coverage may seem cheaper (one premium), but likely it has a large combined deductible, and non-preventive dental expenses may not be covered until the medical deductible is satisfied. The high out-of-pocket maximum for medical must be reached before covered pediatric dental or vision would be paid in full.
  7. Tax credits and subsidy restrictions. Employers with fewer than 25 employees may receive tax credits for medical coverage only. This credit is available only when purchasing within an exchange in 2014 and 2015. Only individuals who purchase benefits in the public individual exchange can obtain premium tax credits to help with medical premiums. This subsidy will be applied to the medical coverage first and may not be large enough to cover dental benefit costs.
  8. Exchange shopping may be restrictive. Benefit selections will be limited to set plan designs and selected insurance carriers. It appears that employers will not be able to customize plans.
  9. Plan comparisons may be difficult. Employees seeking additional or separate coverage from their employer’s plan should know exactly what procedures both plans cover. Look for benefits that properly supplement employer plans to avoid losing overall coverage.
  10. Exchanges may be expensive. Plans offered in an exchange may not be cheaper than those offered by an insurance carrier in the private market. In an exchange, plan premiums are based on specific criteria instead of utilization trends within an employer’s industry or claim experience. Since insurance carriers will be charged by state and federal governments to participate in exchanges, these fees likely will be included in the premium cost.

 Keep Existing Dental and Vision Plans

Health care reform dictates new directions for health benefits, but the needs of Americans have not changed. Preventive dental and vision services are essential for good health at any age. If you have questions about your plan's ability to meet your needs or want more information, your Ameritas dental and vision representative can help. Also see ameritasgroup.com’s health care reform section. Or contact Karen Gustin, senior vice president – group field sales, national accounts and broker blocks, at kgustin@ameritas.com.

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