Introducing…Dental (A-81000 Series)

2

Field Sales Guide

• Provides standard information only

• Available online via AFLAC University

• Review administrative guidelines for state- specific information

Section 1

Introduction

Page 114

AFLAC Dental

• First introduced in 2000

• $60 million in 2001

• 2003 – reduced group size and participation requirements

• 2004 – opened to nonpayroll sales

Page 115

People Want Dental Insurance

• The ADA recommends two dental cleanings per year

• Having dental insurance and getting the recommended cleanings allows policyholders to realize immediate benefits

• Dental insurance consistently ranks high in employee benefit polls

Page 116

The Small Employer Market

• Often don’t offer dental insurance because of the cost

• Want a simple product that is not complicated by provider networks, pre- certification, etc.

• Nonpayroll rates available if needed

Page 127

The Large Employer Market

• Provider networks and pre-certification help to reduce costs

• Often employer-paid

• 90% of employers with at least 500 employees already offer dental benefits

Page 128

Focus on Small Businesses

• Only 56% of all employers offer dental benefits

• Small employers need dental insurance!

Page 139

What’s New with AFLAC Dental?

• Fewer options

• X-Ray Benefit

• 3-month waiting period for fillings

• Increased benefits

• Orthodontic rider covers everyone

Page 1310

What’s New with AFLAC Dental?

• New Cosmetic Rider

• Provider education tools

• Enhanced brochures

• Streamlined competitive replacement process

Section 2

The Dental Insurance Market

Page 1712

Medical vs. Dental Insurance

Medical• Spread of risk; price is based

on an estimate of how many people will use it

• Out-of-pocket expenses are capped for the policyholder

Dental• High utilization; most everyone

will use it

• Yearly benefits are capped to control expenses

• Focus on preventive benefits

Page 1813

Types of Dental Insurance

• Indemnity Plans

• PPOs

• HMOs

• Table of Allowances

• Direct Reimbursement

• Discount Plans

Page 1814

Indemnity Plans

• “Traditional” dental insurance

• Based on usual, customary, and reasonable (UCR) fees– 100% for preventive care– 80% for restorative services– 50% for major services

• Annual maximums

• Usually a deductible

Page 1815

Preferred Provider Organizations (PPOs)

• Provider network

• Providers agree to pre-set fees and savings are passed to the insured

• Usually no deductible

• Patient can go out of network, but will incur higher costs

• Exclusive Provider Organizations (EPOs) do not cover out-of-network treatment

Page 1816

Health Maintenance Organizations (HMOs)

• Capitation plans

• Preventive and basic services usually performed at no charge

• Patient may have a co-payment for major services

• Raises concerns about the quality of treatment

Page 1817

Table of Allowances

• Similar to AFLAC’s definition of “indemnity”

• Fixed benefit is paid for each procedure, regardless of charges

• Patient chooses dentist

• AFLAC Dental is a table of allowances plan

Page 1918

Direct Reimbursement

• Self-funded by employer

• Patient pays dentist and files for reimbursement with employer

• Reimbursement based on charges, not type of treatment

• Patient chooses dentist

• The ADA promotes direct reimbursement plans

Page 1919

Discount Plans

• Not a form of insurance

• Requires a membership fee

• Participating dentists provide discounted services

• No benefit maximums

• Typically quote a savings of 20%-50%

Page 1920

Categories of Benefits

• Preventive, Diagnostic, and Emergency – Oral examinations, cleanings, X-rays– Fluoride applications, sealants

• Routine or Basic Care– Fillings– Routine oral surgery, periodontal care

• Complex or Major Care– Crowns– Complex oral surgery, extensive care

Section 3

Plan Structure

Page 2322

Original AFLAC Dental

• 6 levels of coverage

• Too many options

• Higher Wellness Benefit consistently outsold lower benefit– Level 4 – 38%– Level 3 – 3%

Page 2323

New AFLAC Dental Options

Basic• $25 wellness• Lowest benefit schedule

Standard• $50 wellness• Mid-range benefits

Premier• $50 wellness• Higher tier of benefits

Page 2424

Waiting Period

• Period of time after effective date for which benefits are not payable

• Controls costs by preventing immediate claims

• Reduces the chance that a person will buy dental insurance because he or she needs a specific procedure

• Compensates for little underwriting

Page 2425

Waiting Periods:

• Start over on the date of reinstatement

• Begin on the effective date of a dependent’s addition to the policy

• Apply to increased benefit amounts for conversions

• Run from the original effective date for downgrades

Page 2426

Waiting Periods

Dental Wellness Benefits None

X-Ray Benefit None

Other Preventive Benefits 6 months

Other Diagnostic Benefits 3 months

Fillings and Other Basic Restorative Benefits 3 months

Crowns and Other Major Restorative Benefits 12 months

Root Canals and Other Endodontic Benefits 12 months

Page 2427

Waiting Periods

Gum Treatments/Periodontic Benefits 6 months

Dentures and Other Prosthetic Benefits 24 months

Repairs and Adjustments to Prosthetics Benefits 6 months

Extractions and Other Oral Surgery Benefits 6 months

Pain Relief and Other Adjunctive Services Benefits 3 months

Orthodontic Benefit Rider 24 months

Cosmetic Benefit Rider 24 months

Page 2528

Policy Year Maximums

• Maximum benefits payable per covered person per policy year

• Does not include Wellness and X-rays

– Basic - $1,200

– Standard - $1,400

– Premier - $1,600

Section 4

Policy Benefits and Provisions

Page 2930

Wellness Benefit

• Pays for one listed treatment per visit

• Visits must be separated by 150 days or more

• Payable twice per person, per policy year

Examples:– Oral evaluations– Cleanings– Fluoride applications

Page 2931

X-Ray Benefit (new!)

• Pays for one listed X-ray procedure per visit

• Payable once per person per policy year

– Basic - $10

– Standard - $25

– Premier - $25

Pages 29-4432

Schedule of Dental Procedures

• Benefit amounts are listed by ADA code

• If ADA codes change, we will pay an amount comparable for the procedure

• Procedures may fall under more than one category

• Only the schedule varies among the different plans – waiting periods, limitations and exclusions, etc. are the same

Page 4533

Orthodontic Benefit Rider

• Applies to all covered persons (new!)

• After 24 month waiting period, pays:– $600 for initial orthodontic treatment– $200 every third month for continued treatment– Covered treatments listed by ADA code

• $1,200 lifetime maximum per person

• $2,400 maximum per policy year

• Payroll sales only

Page 4634

Cosmetic Benefit Rider (new!)

• Applies to all covered persons

• After 24 month waiting period, pays for specific procedures at benefit amounts listed

• Examples: bleaching teeth, veneers, etc.

• $1,800 lifetime maximum per policy

• $600 maximum per policy year

• Payroll sales only

Page 4735

Limitations and Exclusions

• Procedures not listed in the schedule

• Services not recommended by a dentist or not required for oral health

• Repairs to dental work within six months of initial work

• Replacement prosthetics within five years of last placement

• Treatment involving crowns within five years of last placement

Page 4736

Limitations and Exclusions (continued)

• Replacement for inlays or onlays within five years of last placement

• Treatment received while outside the U.S.

• Sealants:– Secondary molars for children under 16– Not more often than every five years

• Replacement of teeth missing before the effective date of coverage

Section 5

Administrative Guidelines

Page 6738

Eligibility Requirements

• Issue ages:– 1865 on payroll– 1864 on nonpayroll

• No minimum group size for payroll

• Dependent ages 19/23

• Optional riders available for payroll sales only

• If supplementing existing dental insurance, only the Basic policy may be offered

Page 6739

Administrative Guidelines

• Flex:– Base policy and Ortho Rider eligible for pre-tax – Cosmetic Rider is after-tax only

• Advanced Effective Date (new!)– Up to 90 days from enrollment date– More than 60 days requires Statement of Understanding

Page 6840

Additional Forms

• Replacement Notice – if replacing another carrier’s dental policy

• Outline of Coverage – if required in your state

• Guide to Health Insurance for People with Medicare – if applicant is eligible for Medicare

Page 6841

Renewable/Portable

• Guaranteed-renewable for the policyholder’s lifetime

• Payroll rate may be retained after one month’s payment through payroll deduction

• Changes once on direct billing will be subject to direct rates, underwriting, and eligibility rules

Page 6942

Missed Payments

• Dental uses a shorter lapse cycle– Status 13 (no premiums received)

– Will be notified after the second missed invoice and will lapse in 30 days

– Status 22 (active) – Will be notified after the first missed invoice and will lapse in 30

days

• No claims paid on policies more than 90 days in arrears, regardless of policy status

Section 6

Sales Support Materials

Page 7344

Brochures

• Brochure folder A81075

• Insert for each policy:

– Basic A81175– Standard A81275– Premier A81375

• Inserts list every covered procedure and benefit amount (new!)

Pages 73-7445

Additional Pieces

• Rider inserts:– Orthodontic A81076– Cosmetic A81077

• Mailer A81090– Suitable for both payroll and direct prospects

• Employer Flyer MMC-00-236– Intended for employers - also used with Dental A-80000 Series

Page 7346

Provider Education Tools (new!)

• Tent card M1078

• www.aflacdental.com

• Both provide tips for completing the ADA claim form and filing claims electronically

• Web site allows provider to enter policy number and ADA codes to retrieve benefit information– Active policies only– Only when policy record is available

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Section 7

Applications/Underwriting

Page 7751

Applications

• Payroll A81001

• Nonpayroll A81002D

• Applicant’s section includes a space for the dental provider’s name

• Replacement questions:– Only Basic plan allowed if keeping other dental insurance– Must convert an existing AFLAC policy– Replacement Notice may be required

Page 7752

Dependent Information

• Dependents must be listed on application

• Complete Supplement Form A-80005 – if more than eight

dependent children and provide proof of dependent status

• Use form A81003 to add newborns and adopted children within 31 days

Page 7853

Underwriting

• No underwriting for payroll applications

• Nonpayroll applications have one question: – Have you or has anyone to be covered been diagnosed with or

treated for any gum disease such as gingivitis within the last 24 months?

• Any such person will not be covered

Page 7854

Conversions

• Use new business applications

• Check conversion box and provide current policy number

• For increased benefits, new waiting periods apply only to the increase in coverage

• For reduced benefits, waiting periods run from the original effective date

Page 7855

Continuous Coverage

• Spouse’s coverage terminates at divorce; may apply for equal or lower coverage without evidence of insurability

• If primary dies, spouse becomes primary insured

• Dependent children must apply within 31 days of losing dependent status to avoid interruption in coverage

Section 8

Rates and Commissions

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Rate Comparison

New Plan Original Plan Aggregate Premium Increase

Aggregate Benefit Increase

Basic Level 2 6% 17%

Standard Level 4 9% 21%

Premier Level 6 20% 19%

Page 9358

Forms

• Rate sheet– M-RS069-1

• Premium work sheet– A90137-1

• Field Sales Guide includes standard rates only

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Commissions

First Year Renewals

New Associate Basic Plan 25.00% 6.10%

New Associate Other Plans 20.00% 5.10%

Veteran Basic Plan 14.00% 10.90%

Veteran Other Plans 10.50% 9.60%

Section 9

Competitive Replacements

Page 10161

Requirements

• Competitive replacements allow reduced waiting periods under the following conditions:– Fifty or more eligible employees

– Replacing a group dental plan that has been in place for at least one year

– At least 70% participation in AFLAC Dental

• Conversions of existing AFLAC Dental policies do not count toward participation requirements.

Pages 101-10262

Reduced Waiting Periods

• Available only during the initial enrollment period.

• Anyone applying after this time, including new employees, will receive standard waiting periods.

• All competitive replacement requirements must be met to receive reduced waiting periods.

Page 10163

Request Form

• Competitive Replacement Checksheet Form M0978R – Submit with paper applications

– Submit at least seven days prior to SmartApp® enrollments, then download group update to access the applications

• Form M0978R is available on Associate Services

Page 10264

Application (new process!)

• Form A8101T

• Applicant must indicate whether or not standard waiting periods are acceptable, in case all requirements are not met.

• This prevents you from having to go back and obtain standard applications.

• Advise applicants to check their Policy Schedule for waiting periods.

Page 10365

Commissions

New or Veteran Associate:

First Year Renewals

Basic Plan 7.50% 7.50%

All Other Plans 7.00% 7.00%

Riders 2.35% 2.35%

Section 10

Claims

Page 11167

Filing Instructions

• ADA Claim Form HF004

• Electronic claims preferred

• Typed claim forms should be mailed

• Claim checks will not be mailed to the associate

• Most payments will be made to the provider; if an overpayment, the provider should reimburse the insured

Page 11168

Claims Guidelines

• ID cards are contained in the policy and reference the provider Website

• No claims paid on policies more than 90 days in arrears

• Please do not send X-rays

• ADA code revisions may be requested from the Customer Call Center

Section 11

Marketing AFLAC Dental

Page 11770

Key Features

• No:– Provider network– Pre-certification– Deductible– Coordination of benefits

• Simple plan design

• Individually owned

• Rate stability

Page 11871

Understanding Group Dental

• UCR charges do not necessarily reflect what an individual provider will charge

• Percentages cannot easily translate to a benefit amount until charged

• High participation requirements, may also require employer contribution

• Policy owned by the group

Page 11872

The AFLAC Advantage

• Table of allowances makes benefit determination easy!

• Freedom to choose any dentist

• Individually owned

• Portable

• Rates not tied to group experience

• Contract is between AFLAC and individual

Page 11973

How Much Coverage is Needed?

• Highest level not always appropriate

• Dental treatment unlikely to cause catastrophic financial consequences

• Benefits should reduce out-of-pocket expenses, not necessarily eliminate them

• Overselling may take premium dollars from other AFLAC products

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“Saving” for Rider Benefits

• Ortho Rider– 34 months to receive full individual benefits– Individual benefits = $1,200– 34 individual monthly premiums = $918

• Cosmetic Rider– 49 months to receive full benefits– Full benefits = $1,800– 49 monthly premiums = $1259.30

• Ortho Rider also has pre-tax advantage

Section 12

Dental Terminology

(self study)

Section 13

Forms List

(self study)

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Thank you and Good Luck!