A New Tool To Attract and Retain Experienced Workers

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1 Retiree Dental Benefits A New Tool To Attract and Retain Experienced Workers

2 Overview According to MetLife s Sixth Annual Employee Benefits Trends Study, benefits are an increasingly important tool in employers arsenal to attract and retain experienced employees through retirement. Consider: Forty-five percent of all employees say benefits are an important reason they remain at their current job, up from 33% in 2006 and 35% in 2004; one-third say benefits were an important reason for taking the job in the first place, up from 25% in There is a strong correlation between benefits satisfaction and job satisfaction among employees who are satisfied with their benefits, 70% say benefits are an important reason to remain with an employer, compared to just 14% among those who are not satisfied with their benefits. 1 77% of employees surveyed have dental insurance coverage. 1 However, only 22% of employers offer dental insurance benefits to their employees after they retire. 1 Dental benefits are not covered by Medicare and there is limited availability of dental benefit plans on an individual basis other than the few offerings in the marketplace today. For employers depending on the skills of a mature workforce, offering benefits post-retirement has become a competitive strategy for attracting and retaining experienced employees. The reason? As employees assume greater fiscal responsibility for their own healthcare decisions, retirement planning and overall financial protection, they are seeing retiree benefits as an integral way to help maintain a personal safety net. For example: looming retirement is adding a new set of concerns for older individuals who are struggling to make ends meet even while they are actively employed. MetLife research shows that more than one-third (35%) of employees nearing retirement (ages 51 and older) say they are currently living paycheck to paycheck, and nearly half (48%) of these mature workers presently put 70% or more of their monthly household income toward bills and living expenses. 2 1 Sixth Annual MetLife Study of Employee Benefits Trends, April Fifth Annual MetLife Study of Employee Benefits Trends, February Retiree Dental Benefits 1

3 It makes sense that while 42% of American companies currently offer retiree benefits, such as medical, dental or life insurance, nearly three-fourths of these employers (73%) say they plan to increase the dollar amount spent on retiree benefits over the next five years. 1 Retiree Dental Benefits 2

4 PROVISION TO LOOK FOR: Why Retiree Dental Benefits? The Link between Aging and Propensity for Extensive Dental Treatment The elderly U.S. population is growing at a substantial pace: according to the American Journal of Public Health, in 2015 older adults will number approximately 46 million and fifteen years later (2030), one in five Americans will be 65 years of age or older. 3 The following are some of the factors that demonstrate why this demographic group is likely to have significant dental treatment needs both now and in the future: Older adults are keeping their teeth longer due to fluoride, improved dental technologies, changing attitudes on the importance of dental care, better oral hygiene, and increased dental service utilization. Less than 30% of adults age 65 years and older surveyed from 1999 to 2004 experience edentulism (complete loss of all natural teeth). 4 In addition, nearly 70% of people aged 75 years and over surveyed from 1999 to 2004 have some remaining natural teeth averaging approximately 10 teeth lost. 4 An older adult population retaining more natural teeth expands the need for increased dental treatment among this age group than those of previous generations. For example: fillings, bridges, implants, removable partial dentures, root canals, services to treat gum disease, and preventive based services are treatments needed by older adults. In addition, retirees are increasingly interested in esthetic dental treatments including teeth bleaching, bonding and veneers, and even orthodontics. Dental cavities (caries) are a substantial problem for older adults and are a major cause of tooth loss. Nearly one-fifth (18%) of adults 65 years and older, surveyed from 1999 to 2004, have untreated dental caries. 4 If untreated, caries can cause pain, dental abscess formation, and may also lead to a significant facial infection with major health consequences. Oral cancer is predominantly a disorder of the elderly. Those over the age of 65 are seven times more likely to be diagnosed with oral cancer than those under Detection of oral cancer through periodic dental examinations can significantly reduce the risk of these life threatening cancers. 3 Oral Health Care Services for Older Adults: A Looming Crisis. American Journal of Public Health, May 2004, Volume 94, No. 5 at Dye BA, Tan S, Smith V, Lewis BG, Barker LK, Thorton-Evans G, et al. Trends in oral health status: United States, and National Center for Health Statistics. Vital Health Stat 11(248) Ageism in Healthcare: Are Our Nation s Seniors Receiving Proper Oral Health Care?, Statement of Richard H. Carmona, Surgeon General, September 22, 2003, ageism htm. Retiree Dental Benefits 3

5 LANGUAGE TO LOOK FOR: The Link between Oral Health and Overall Health Certain research suggests a correlation exists between periodontitis and a person s risk for certain medical conditions. 6 According to the U.S. Dept. of Health and Human Services, there is growing acceptance that diabetes is associated with increased occurrence and progression of periodontitis so much so that periodontitis has been called the sixth complication of diabetes. 7 And not surprisingly the incidence of periodontal disease increases with age. According to a study from the American Academy of Periodontology, more than half of people aged 55 to 64 have periodontal problems. 8 Without dental benefits, many retirees feel a gap in their overall healthcare coverage. 9 Most consumers (85%) understand that there is a strong connection between oral health and overall health. 10 This makes continued affordable access to dental care imperative when older workers leave active employment. Dental benefits are the 5th most popular benefit, behind only medical, 401(k)/403(b), vacation and prescription drug coverage; 1 and not routinely available or applicable to retirees. Dental benefits are not covered by Medicare, unlike medical and prescription drug benefits, and there is limited availability of dental benefit plans on an individual basis, making retirees less likely to maintain regular dental visits due to cost concerns. As a result for America s retirees dental coverage is typically the exception rather than the rule. Therefore, offering access to a dental benefits plan helps employers meet a need since dental coverage is seen as a valued benefit by retirees, who, in general, are living longer, and looking for continued access to affordable oral healthcare. According to MetLife research, half of retirees who want information about dental benefits look to their former employer for help rather than to some other source primarily because they trust them to provide a dental plan that will balance cost and value Lindhe, J., Karring, T., & Lang, N.P. Clinical Periodontology and Implant Dentistry, Fourth Edition. London: Blackwell Scientific, U.S. Dept. of Health & Human Services. Oral Health in America: A Report of the Surgeon General. Rockville, MD: U. S. Dept. of Health & Human Services, National Institute of Dental and Craniofacial Research, National Institutes of Health, 2000 at Epidemiology of Periodontal Diseases Academy Report, Volume 76 Number 8, American Academy of Periodontology, August MetLife Research, WhyMetLife for Dental, April MetLife Research, Oral Health Insights, November MetLife Research, Full Service Dental for Retirees Conjoint Study, June Retiree Dental Benefits 4

6 PROVISION TO LOOK FOR: What Retired Employees and Employers Want in a Dental Benefits Plan Adding retiree dental coverage through a voluntary (employee-paid) plan presents attractive options for both employers and retirees. On the one hand, employers can now offer their employees dental insurance products that balance the needs of retirees cost and value while maintaining affordability with little administration and no benefits expense. On the other hand, retirees can gain access to group rates for dental coverage, which helps them manage their dental expenses. In the past five years, dental costs have increased between 5% and 8% per year 12 an inflation rate up to three times that of goods and services shown in the Consumer Price Index. 13 So it is understandable that, access to a comprehensive dental plan helps retirees maintain their oral health. Important in this equation is that the dental benefits plan is offered by a company they know and trust to meet these needs. 14 Dental Plan Features for Retirees Retirees who value oral health are looking for a comprehensive benefits plan. And, based on MetLife research, a valuable dental plan for today s retirees is not solely based on price but balanced with richness of benefits and service 11 retirees do not want less coverage for less cost. In particular, retirees are not only looking for a dental benefits plan that covers preventive and basic procedures, but also major treatments such as implants, resin fillings on molars and dentures. 11 Retirees also place high value on increased annual maximums, limited deductibles (on major services only or no deductible at all) and they re willing to pay for these features Centers for Medicare & Medicaid Services, Office of the Actuary. National Health Expenditures , History and Projections by Type of Service and Source of Funds: Calendar Years , January U.S.Department of Labor, Bureau of Labor Statistics, Consumer Price Index: December 2006, January MetLife Research, Full Service Dental for Retirees Buyer Non Buyer Study, January Retiree Dental Benefits 5

7 PROVISION TO LOOK FOR: Additionally, retirees and pre-retirees alike value simplicity the ability to see their dentist and receive benefits even if their dentist is not participating is important. 11 More than one-third (37%) of working Americans have established long-term relationships with their dentists that span six or more years. 10 And, 95% of retirees agree that being able to see dentist of choice was important to them. 14 In addition, a plan s service capabilities need to be flexible as this population segment has a wide variety of preferences on how they want to obtain benefit information and enroll in plans. A multi-channel service approach works best to meet retiree s desires for ease of service. Dental Plan Features for Employers Employers can and should expect minimal administration and no additional benefit costs when providing a dental benefits plan to both retirees and current employees as they retiree. In fact, more convenient for your employees than buying these products on their own and better rates/group rates for employees are two of the top reasons that employers like voluntary benefits. 1 Retiree Dental Benefits 6

8 PROVISION TO LOOK FOR: MetLife s Full Service Dental for Retirees To address the dental needs of today s retirees and employers alike, MetLife has created a dental benefits plan for retirees. MetLife s Full Service Dental for Retirees enables employers the ability to enrich retirement benefits with coverage retirees value at no benefit expense and minimal administration retirees pay the entire premium. Full Service Dental for Retirees offers a robust benefits plan of value and quality service, with two plan options to meet retiree s needs, competitive rates, and the ability to obtain coverage for spouses and dependents the emerging needs of today s and tomorrows retirees can be addressed. MetLife Full Service Dental for Retirees includes: Marketing to retirees with a multi-phase, multi-media communication campaign that will help retirees access information, understand their risks and make an informed decision about their benefit coverage selection. Enrollment via multiple channels to address retirees preference for accessing information and enrolling Internet, paper or phone with a Customer Service Representative. Customer service teams focused specifically on dental benefits with enhanced training specific to the retiree market to deliver best-in-class service. Focus on savings from MetLife s negotiated fees, which extend to all services rendered by network dentists, even to non-covered services and services provided after the annual benefit maximum has been exceeded. Recordkeeping and billing services that provide enhanced capabilities, employers only have to provide eligibility files MetLife takes care of the rest. Retiree Dental Benefits 7

9 Conclusion Adding retiree dental coverage through voluntary (consumer-paid) plans is advantageous to both employer and employee. As employees approach retirement age, a key concern is dental benefits, which are of growing importance to older workers who fear losing coverage. To individuals who were struggling to make ends meet when they were actively employed, retirement brings a brand new set of financial challenges for which retirement benefits can offer a comforting safety net. The implications for employers are numerous. Dental coverage is considered a valued benefit by employees of all ages, but today s retirees who are living longer than previous generations struggle with maintaining the healthier aspects of their lifestyle as dental cost continue to increase and access to affordable dental benefits is limited. By offering dental benefits into retirement, employers can help retirees maintain trusted relationships with their dentists, as well as help reduce the financial obstacles that can prevent retirees from obtaining appropriate oral healthcare. In addition, the potential connection between oral health and overall health makes dental benefits even more valuable for both the retiree and the former employer, who may be paying for the healthcare coverage. With talent retention also a growing concern, offering retiree dental benefits can be a way for employers to further differentiate themselves when it comes to competitive benefit offerings. This is a chance for employers to provide a true value-added service for retirees, at a time when there is more and more pressure to cut retiree benefits. Retiree Dental Benefits 8

10 (1008) 2008 METLIFE, INC. L (exp1009)(All States)(DC,GU,MP,PR,VI) PEANUTS United Feature Syndicate, Inc. Metropolitan Life Insurance Company 200 Park Avenue, New York, NY