Insurance works on the basis of EXCLUSION. Some people pay premiums to receive a benefit and then don’t use that benefit. They are excluded. The cash from the excluded creates the money needed to pay people who need the benefit. Exclusion is normal when people don’t really need a benefit. For example, in life insurance, people don’t really want to die, and in auto insurance, we don’t want to get into traffic accidents either.
The problem in dentistry is that everybody should be INCLUDED. We all need dental hygiene to fight gum disease, and most people need orthodontics to align their bite, to give two examples. That is why it is mathematically impossible for these plans to deliver what they promise in benefit max or covered services. Because nobody can be excluded naturally, traditional dental plans CREATE exclusion by denying claims instead. This creates an inappropriate business model. It is incredibly inefficient, as a business, to promise things you know you can’t deliver, and then invest in the expense of NOT delivering them (by denying claims).
Traditional self-funding cuts out the insurance profit incentive, but it still uses this inappropriate business model, so it’s just “less bad”, but not great. When you review data, filed by insurers themselves (CLICK HERE), your employees get 4 to 6 times LESS than the insurer promises, on average. In hard numbers, if you pay $400 in premium expecting $1,000 – $2,000 in benefit, on average your employees will get $240-$320. That’s a terrible use of money.