# setting up a dental plan ?



## donald (Apr 18, 2011)

Ive been self-employed now for 6 yrs and finally want to start looking into setting up a dental plan(small company,5-6 people)is it worth it for me?

I go for regular teeth cleanings about every six mouths,and have a few(3)small cavities that are not ''major"but my dentist is recomending i get them filled so they dont turn into a serious problem.

Im looking to cover my dad(who works for me)mainly because he does'nt go nearly as much as he should(honestly think he goes 1-2 every five yrs)

What really made me decide this is Tuesday i got all my wisdom teeth pulled(i dont know what was worse!the dentist leaning into my jaw to "snap" the tooth off or the bill...lol)Part of the reason i never went "under" was it was a extra $250 for a anethitist(that how you spell it)and to get the wisdom teeth pulled was $1400 so i opted out of going under,big mistake!hurt like hell!i could smell my teeth burning with the drill and i had badly impacted 3rd mollars anyways the nightmare aside and my baseball face aside.

Could anyone give me direction on how to set one up?how do i?Whats the rates?i understand i would set it up with my insurer...does anybody have any expirence with this?usally im spending about 500 a yr now uninsured....would this even be cost effective for me and my situation?im i too small for a ''group plan''.


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## balexis (Apr 4, 2009)

Hi Donald,
Dental plans are not insurance products. The cost for a small business is pretty much the cost of past reclamations + some management fee. While there _may_ be some tax incentives to go this way vs paying strictly for what you need, don't think you'll be able to pay a small fee for lots of reclamations and "save".

Also, for a small company, the impact of one employee with very high claims in one year will have a huge impact on the cost of the package of all the others. Not necessarily something you want (unless you are the high claimer).

In a group insurance package, only a few items are actually insurance products: disability, life and a special case for drugs/health coverage where very high claims are effectively insured (by law, at least in Quebec) so that it does not dramatically affect the package costs.

IMO, I'd just pay the dentist whenever I need it.


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## FrugalTrader (Oct 13, 2008)

Donald, are you setup as a corp? Have you considered setting up a Health Spending Account?


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## the-royal-mail (Dec 11, 2009)

balexis is right. Do a search in CMF as I believe this was discussed once before. You have to pay in to the plan for like 2 years before you can get some major surgery done like wisdom teeth or implants, and even then there is an upper limit of how much you can spend. Don't forget the companies in question also need to make money and will charge more if you have pre-existing health conditions or medication needs.

Don't think you'll pay $10 a month or something and get $3000 worth of work done.

The companies providing this are there to make money.

Just pay the dentist as required and move on.


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## OptsyEagle (Nov 29, 2009)

I don't understand the exact question. Are you asking about setting up a dental plan for all 5 or 6 employees that work for you or an individual plan just for you and your family?

The final answer will be the same. It will cost you a lot more money, but for that extra money you get:

for the employees, you are supposed to get happy, hard working and loyal employees. I don't know about the hard working and happy part but I would agree that very, very few people intend to work forever for a company without any benefit plans. This is simply because a lack of benefits shows a big lack of stability. Those jobs are just jobs people take until they can get a real job. That of course is my opinion and there will be a few exceptions, but not many.

For your individual plan, the only additional benefit you will get for the extra money you will pay, is the piece of mind that if some of the really expensive problems arise, you have some insurance. Unfortuneatly, these big bills are capped and deferred for a couple years as well, so even that doesn't work very well. As someone said, these companies intend to make money, not provide it.

There is no free lunch. The only reason regular dental plans work is because of the employers willingness to pay the extra costs. From your post, I doubt you are willing to pay any extra costs, so this idea will not work for you.


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## Toronto.gal (Jan 8, 2010)

I don't know anything about your business, income, employees, etc., however, if you're interested in group insurance, there are plans tailored for small group of employees. In GWL's example, there is a plan for 3 to 4 employees and for 5 up to 30 employees. 

Typically, for most small groups, the underwriting method may be partially experience rated or fully pooled, meaning that claims experience would not affect the premium renewal rates.

*TRM:* the typical waiting periods for dental benefits is 3/6 months, not 2 years [the maximum I have seen is 1 year]. And extractions are considered basic services, not major. I'm glad you're not my employer, lol.

In the GWL example, 

*1. Basic coverage includes:*

• Oral exams
• Cleanings/fluoride: two every 12 months
Optional: one every nine months, or one every 12 months
• Preventative scaling, combined with root planing: 14 units every 
12 months 
Optional: 10 units every 12 months or 6 units every 12 months
• X-rays
• Fluoride: once per year. Optional: once per 9 months
• Sealant
• Fillings
• *Extraction*
• Endodontics
• Periodontics
• Denture relines, rebases, repairs and adjustments
• Oral surgery
• Injections and anaesthesia

*2. Major coverage:*

Basic coverage plus the following:
• Crowns
• Onlays
• Dentures
• Bridgework
• Denture-related surgery

You can read the following and request a proposal/quote for premium rate information & then compare with other insurers. 

http://www.greatwestlife.com/001/Ho...nefits_Solutions_for_Small_Business/S6_000221

https://ykc.greatwestlife.com/public/stellent/groups/public/documents/S1_168834.pdf

@edit: another thought is to use a broker/association plan.


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## the-royal-mail (Dec 11, 2009)

You have misunderstood me, to.gal.

In some of the plans I've looked at in the past, they had some rules about making major claims and one of those rules was that you be paying into the plan for a minimum of 2 years, and only afterwards could you make a major claim. And even in that case the major claim was only paid back at 80% up to a pre-set maximum.


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## Toronto.gal (Jan 8, 2010)

There are very few plans these days without deductible/coinsurance. The days when the employer paid for 100% of the premiums are gone.

Most dental plans do not reimburse 100% for major, only for basic.


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## Brian Weatherdon CFP (Jan 18, 2011)

Kudo's to Money Gal for good overview.

If you happen to be CFIB member or willing to consider membership you can get a quote there that is very strategically priced. 1-866-693-2342  for info. This avenue can give you a quote for benefits, and refer you directly with an broker authorized with Cdn Federation of Independant Business in your area.

Otherwise it's best to speak directly with a broker who regularly servces in benefits for health, dental, disability etc for small business.


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## stephenheath (Apr 3, 2009)

It sounds like the main reasoning behind this is to save money, but in my experience you're just adding a layer of bureaucracy and more pockets that want a profit... you're probably better off just finding a dentist that gives non-insurance a discount to save money rather than going this route.


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## MoneyGal (Apr 24, 2009)

Toronto.gal, not me. It is important to keep us gals distinct (although we are both excellent)


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## Brian Weatherdon CFP (Jan 18, 2011)

A benefits plan (as indicated by many above) isn't to "save money". It provides tax-deductible business expense with tax-free benefit. It also creates a known budget item each month rather than facing high expenses in any month. Frankly this also suggests dental could be an optional item, whereas disability for sure, and health probably, are worth insuring.

BTW a medical reimbursement plan ("cost plus") can be added for owners or key persons in a plan, to reimburse otherwise uninsured items. Costs nothing except when you use it; modest admin fee (non-commissionable) when you do choose to use it. Discussing this with a broker who normally offers this line of business can help you create the strategic value you're seeking.


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## marina628 (Dec 14, 2010)

We have about 40 employees and it cost us $160 per employee each month for medical ,dental and we also cover eye glasses.Dental is capped at $1500 per year per family member.


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## donald (Apr 18, 2011)

Thanks for the replies.I have one independent crew that sub contracts off me legally(except im debating to see/weight the pro and cons if i was to try and intice him and his ''crew'' to be full time employees)Its trickey because he has himself spread between 3 companies,1 being mine....Essential we are both "independent'' and my other employees are on my crew and from a profit standpoint i actually seek out young college kids....My dad does estimating/and deals with the suppliers so i dont have the "normal" structure of a small company.Sounds like my best bet is to just pay as i go.

Ps-Man alive does wisdom teeth extraction suck!!wonder how many fricken yrs we have to go before we evolve past are hunter/gatherer past with these bloody burried teeth in jaws that are not built for them,what a pain lol


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## OhGreatGuru (May 24, 2009)

No one is going to sell (at reasonable rates) a dental plan to a small, select, group, who have a known history of dental care needs. You would have to find some group or plan that you can affiliate with, so the insurer can spread his risk. Group insurance is most affordable where enrolment for everyone in the group is compulsory, regardless of age, because the healthy people subsidize the others.


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## Homerhomer (Oct 18, 2010)

Check out this private health services plan, the management fee is 5% but the expenses became tax deductible expense in the company.

http://brockhealth.ca/how_it_works.html?gclid=CP3N95HVjq0CFUQRNAodHgMkmA

It works better for the corporation and it is an employee benefit plan, so the family members have to be employed by the company to take advantage.


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## Brian Weatherdon CFP (Jan 18, 2011)

Donald, back to your original purpose and presentation: if your purpose is to get coverage for 5 to 6 people in your business, you can indeed qualify for a group plan. Savings (despite insurer's admin cost) are due to it being tax-deductible to your business and tax-free reimbursement for each member. Plus, it naturally helps business retain or attract desired staff. 

If it's really not a "business" issue, then covering costs yourself, and having a one-of health/dental plan for your father could seem reasonable.


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## donald (Apr 18, 2011)

Thanks brian,Im going to look into it abit further, along with getting disabilty insurance if i can ''wrap" it all in one.A friend of mine who works @ GWL was telling me they have packages and can sit down with me and tailor a plan,the only thing i "fight" is if im not sharp, to pick up on what there laying out for me, i don't want to ''get'' into anything thats not benefitting me.

Last few yrs(5-6) as a start-up/freelancing/self-employment i was just foucusing on securing work and going through the ups and down.(dental plans were the least of concerns)Now im coming into a ''phase'' were i can finally start to actually build a business,where im able to step back and off the tools personally.(i boot strapped completely from 05-to now)Its a construction business.

I have insurance in place with my (ltd).....(im also in the phase now where i just dont blindly ''sign''stuff now,without actually ''knowing",in all things and paper work)

Spell check isnt working.mine.


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## brocko (Apr 20, 2009)

Toronto gal I liked what you wrote however one small correction and that is fully pooled does not mean no rate increases. In fact fully pooled means the experience of the pool is calculated and a pool increase is applied to the members of the pool. This is generally for very small groups as even from 3 lives and up the experience is considered and then based on a credibility factor an adjustment to the renewal rates is made.
In any event I think a health spending account should be considered in this case as having contractors as part of the equation would only create "toothaches " for all concerned.


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## donald (Apr 18, 2011)

Brock,would you be kind enough to explian what a health spending account is?in laymans terms.

Even if i was the "only" one on it.

What does it cover?who is it through?a company gwl?

Here is my backround if it helps so you can get a better read on my sistuation:
Been incorporated since 05,last 2 yrs 09/10 my annual total revenue is around $380,000....last 2 yrs i have been paid by dividends/bonuses(lump sums)60k in 09 and 75k in 10,ive never drawen a salary since ive been incorporared(crazy i know,but thats just been how its been)Ive had a house sale so im getting back into the market again right away(prevoius house i sold for a profit of 125k)Basically im a lone ranger,but now i have a sub who is subbing jobs off of me.

Here is my net worth-88k in hisa(using this as a down payment on a lot soon)
13k(lost 2k)in a tfsa-140k in rrsp(lost 6k)60k(lost 7k) in a non registerd acct

Now under the corporation:44k in a moneymarket-66k in the business chequings acct.32 yr old single male,have workers comp and business insurance...nothing outside of my business though.....Under my sistuation if you were me how would you go about setting up a plan?I gave you my financials so you can give me a better read on the case.And what does contractors "toothaches" mean?


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## MoneyGal (Apr 24, 2009)

Very basic (and somewhat biased) explanation of a Health Spending Account: 

http://en.wikipedia.org/wiki/Health_Spending_Account


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## brocko (Apr 20, 2009)

Hi Donald, a spending account or better known as a HSA is a way for a company to allocate a dollar value to employee"s to use to pay for eligible medical and dental expenses and be tax deductible to the employer as in effect the amounts allocated to the employee is deemed a "premium". It sounds easy but there are some things to check out with whomever you go to for adivice and that is what is the implication tax wise if you only cover yourself. CRA does not look well on owners who only cover themselves and then submit huge expenses for deduction on themselves or a family member.

There are of course lots of people and firms to talk to but a leader in the field is Benecaid. I am in no way affiliated nor have i ever been with them however they do a good job. You indicated you like to know everything going into a deal so grill them such that you understand the concept and they fully understand where you are coming from.

I was being facetious with my contractor remark but the main thing is that they are not your employee's so you will need specialized advice should they be considered for any plan of any sort you may wish to start.


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## Toronto.gal (Jan 8, 2010)

brocko said:


> Toronto gal I liked what you wrote however one small correction and that is fully pooled does not mean no rate increases.


Oh no, I did not mean that rates would not increase, just that under a fully pooled underwriting method, the company would not review the claims experience of a single group, but that of a block of business. Anyway, I'm not an expert in financial underwriting, so any comments/corrections are definitely welcomed.

Btw, welcome to CMF brocko!


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## Toronto.gal (Jan 8, 2010)

donald said:


> What does it cover?who is it through?a company gwl?


GWL does not offer HSA to groups under 35 lives.

http://www.greatwestlife.com/001/Ho...enefits/Healthcare_Spending_Account/S7_012333

Here is a better description of what HSA's are:
http://www.standardlife.ca/en/group/insurance/products/spending_account.html


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## brocko (Apr 20, 2009)

Toronto Gal thank you for the welcome.

In the financial underwriting even though the size of the individual member group of the pool may be small I can assure you that every group is reviewed for its own experience. That is not really a bad thing as the the purpose is to keep a clean and profitable pool for the insurer and the other members of the pool. The way I was taught pooling is that fully pooled meant neither dividend nor deficit with all gains and losses attributable to the carrier. The renewal process can be done in a number of ways with the final objective of offering fair rates( lol guess for who) and usually it is the small group client that views their plan as money in and money out with the "out" being in their favor. The volatility of claiming patterns from year to year really skews the picture but bottom line I believe is getting all eligible claims fairly reviewed and paid in a timely fashion.


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## Toronto.gal (Jan 8, 2010)

brocko said:


> I can assure you that every group is reviewed for its own experience....


I agree that insurers would have the experience on all their groups, but my understanding is that the claims experience would be combined with all the other small groups in the pool, as data on a small group alone, would not provide sufficient credible information for rating purposes [unlike big groups like Maple Leaf Foods for example]. As well, if claims experience of each tiny group were to be used for rate increases, many such groups could simply not afford insurance, hence the rate used, is that of the combined claims experience of all the groups in a particular block, but anyway, let's not confuse Donald with all this experience. 

Very glad to have a financial U/W on board!


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## donald (Apr 18, 2011)

Im mostly confused in life of all things toronto gal so no worries lol,im just trying to ''skim'' so i know the ''just'' of things if i go talk to a rep.

I need to start looking into these things long-term now so heaven forbid i get a sever injury.Thanks again....these things seem more challenging for freelance/entreprenuers/small business owners.


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## Toronto.gal (Jan 8, 2010)

LOL Donald, but believe me that you're not alone. 

You should speak to a broker and then write us again with any questions; brocko joined at the right time!


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