Open enrollment time has started at my job which means it is time to determine what changes I need to make to my benefits for the upcoming year. When my wife left her job to start her own business last year I moved everyone to my health insurance plan through my job by signing up for the “family plan”. The nice thing about this is that once you are on the family plan it doesn’t matter how many dependents you have, the cost is still the same. That means when we have our new arrival in a few months there will be no cost increase to the premiums I pay.
I plan to add a dependent child care account to my plan to cover some of the costs of child care with pre-tax money. In the past we used one of these accounts through my wife’s job, but now we will be moving it to mine. The reality of our current situation is that with my job and my wife’s business we need a certain amount of child care to allow us to work, so we might as well take advantage of using pre-tax money to pay for it.
This year I also plan to contribute the maximum amount of money ($2,500) to a flexible spending account to cover medical expenses. With the birth of a new child coming up in a few months, we know we are going to have health care expenses, and my preference is to avoid spending anything out of our health savings accounts, but yet still be able to benefit by using pre-tax money to pay for a significant portion of the costs.
That leaves me with one last decision to make for my open enrollment which is dental insurance. I have spent the last several days calculating costs, looking over benefits, and doing research on dental insurance plans. The outcome of this is that I just can not make sense of how this is anything other than a money losing proposition.
First, let’s start with the cost of the “insurance”. There is only one plan offered through my job, and it is $58 a month per person. That means it costs $696 a year for each of us or $1,392 total if I got coverage for just me and my wife. The plan has a $50 deductible per person for the plan year and a maximum of $2,000 in benefits per person. It includes two cleanings per year that are fully covered after the $50 deductible, but that amount is deducted from your plan maximum decreasing the benefit amount for the rest of the year. For other services it covers anywhere from 50% to 80% with the lower coverage amount on the most expensive types of procedures it labels as “major procedures”. So if things go really wrong and one of us needs major dental work the potential “savings” is $1,254. If we have no major issues and take advantage of two cleanings per year we each will essentially pay $746 per person for those services which seems a little steep.
When I look at this over a period of several years and consider our dental history it seems to make more sense to simply avoid buying dental insurance and pay out of pocket for any services we do need. The premium savings alone, especially when looked at over several years, could easily handle the one or two times we may need major services in the future considering the current state of our teeth. So I think for the first time in many years we are going to go without dental insurance,or at least the plan offered through my employer.