Employer-Sponsored vs. Independently Funded Dental Plans

Whether a plan is an employer-sponsored or individually paid plan is an important factor to consider when purchasing dental insurance.

Employer-sponsored, or fully insured, plans are agreements between an insurance company and an employer. Generally, these plans are designed to pay only a portion of the participant's dental expenses. Under this plan, an employer pays a monthly fixed premium to the insurance company and the company agrees to provide coverage to the employer's participants subject to certain conditions.

An independently funded dental plan, on the other hand, is dental coverage outside a group plan. Under this plan, an individual who is self-employed or who does not have a dental plan with his or her employer, purchases an individual or family dental insurance policy for chosen participants.

For those who have the choice of whether to participate in an employer-sponsored plan or purchase one individually, the employer's plan may make sense for individuals seeking a plan with potentially lower payments and security. However, if an employer does not offer a plan or if a person is self-employed, an independently funded plan may be the only choice. In this instance, it is imperative that the purchaser thoroughly research available plans.

Deciding whether to purchase dental insurance entails assessing several factors, including whether to participate in an employer-sponsored or independently funded plan.

 

 

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