New Canadian Dental Care Plan is no match for existing dental benefits plans
By: Bill Zolis
When we first heard that the government was going to start a dental care program for people who do not have dental coverage at work, I think a lot of people assumed that some employers might consider dropping or cutting back on their dental plan benefits.
After all, why would you pay directly for a something that employees can get for free from the government? Or, to put it another way, why would you pay directly for a benefit when you are already paying indirectly for the same benefit through your taxes?
But it’s not that simple. The way new Canadian Dental Care Plan (CDCP) is designed is raising many questions about eligibility, how to access care, how to find a participating dentist, what services are covered, and what still needs to be paid out-of-pocket.
The big question, of course, relates to what it all means for employers who offer coverage for dental care.
The short answer is that I think it should have minimal effect on private dental benefits. It’s complicated, but I would say that the CDCP is a step up for all those people who have no dental coverage currently, but it would in almost all cases be a step down for anyone who already has a dental benefits plan.
On the surface, if you read the details of the CDCP on the Government of Canada benefits website, it all seems pretty straightforward. However, when you start asking what-about-this and what-about-that questions, it becomes a little more difficult to be completely sure how things will work out in the long run.
But first let’s look at the basic facts about the plan.
Who is covered so far: As of July 2024, the program is about half-way through its planned roll-out. Children under 12 have been covered by an interim program since 2022 and, since May 1, seniors aged 70 and over have been eligible. In June of this year, people under 18 and those with disabilities were added to the list. Seniors aged from 65 to 70 can start applying online now.
All other Canadians – the 18-to-65-year-olds – who meet the household income thresholds will become eligible sometime in 2025, according to the government.
Co-payments: The CDCP refers to “co-payments” based on the level of adjusted family net income.
Basically, if family income is less than $70,000 per year, all the eligible dental services are covered at no cost to the patient and all costs are paid directly by the CDCP to the dental care provider. If family income is between $70,000 and $80,000, there is a 40 percent co-pay – in other words, the patient pays 40 percent of the total charge to the dental care provider directly out-of-pocket. If family income is between $80,000 and $90,000, there is a 60 percent co-pay. If family income is over $90,000, the plan does not apply at all.
The tricky part: Now, here’s where we run into a question that can’t really be answered yet – we’ll have to see how it shakes out over the next few years. According to the CDCP website, “The CDCP fees may not be the same as what providers charge. You may have to pay fees in addition to the potential co-payment…” And by “not the same as” they mean “less than.”
In other words, if the dental practice you go to for care under the CDCP accepts patients under the plan – most still don’t, and they’re not required to – they may still charge more than the plan pays them, and you will have to make up the difference.
The same is true if you receive treatment that is not on the list of services covered by the plan.
What’s covered: The plan covers core services and most regular dental care, although preauthorization is required for many other services, such as retreatment of root canals, crowns, cores and post, bonding of mobile teeth, and post-surgical evaluations.
Who is providing service? According to a report from CBC News, dental professionals in Canada have been reluctant to sign up for the program, and patients may have difficulty finding a provider. The report says that there are approximately 26,500 dentists, 1,700 independent hygienists and 2,400 denturists who could participate in the program but only about 6,500 had signed up as of March this year.
Sun Life, which is managing the program for the federal government, maintains a searchable database of accredited dental care providers.
The seniors coverage gap: However, as CBC News reported, there is some concern among retirees and other seniors about eligibility – even if they meet the income requirements – if they have purchased private coverage and paid for it out-of-pocket. They will not be eligible for the government plan until their private coverage lapses, regardless of the level of benefits provided.
A possibly more serious issue for seniors concerns those who have “access” to private dental care plans through their retirement packages or professional organizations – even if they opted out of coverage, never made a claim or have to pay a premium. The only exception the government has so far made is for those who opted out of coverage before December 11, 2023, and who do not have the option to rejoin their plans.
The family income problem: The government has been requiring employers to report which employees have dental plans at work through their T-4 slips and, of course, has access to their annual income through their overall tax returns to determine who is eligible for the plan.
But what if a person is eligible for coverage based on last year’s tax return, but then gets a raise or works a lot of overtime and exceeds the income threshold? Will there be a claw-back at tax time?
And what if two single people, each with an income of, say, $46,000, decide to get together? They will instantly go from fully covered to not covered at all. (Or, for that matter, what if an ineligible couple breaks up halfway through the year? Do they each now apply for coverage?)
Choice of dentist: One issue that many people using the government dental plan will encounter is the problem of finding a dentist who is part of the program. Currently, only about one in five dental professionals have not opted in, meaning that most people will have to change dentists to take part. Many dental practices are already either full or close to full and may not be able to take on an influx of new patients, especially since many practices will tend to accommodate their existing private-insurance patients first.
So, when people ask me about this – and I should add that it’s not plan sponsors who are asking – I tell them that there are still too many unanswered questions for us to get a good handle on how this will shake out in the long run. But I can also say that I’m not seeing plan sponsors dropping their dental coverage any time soon.
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I really appreciate comments, ideas, suggestions or just observations about the blog or any other topics in benefits management. I always look forward to hearing from readers. If there’s anything you want to share, please email me at bill@penmorebenefits.com.
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