ODA Wellness Trust offers unique, affordable health insurance option

The Affordable Care Act has brought about many changes to the health insurance industry, and the Ohio Dental Association Services Corp. has created a new health insurance plan to meet the needs of dentists and their staffs.

“Offering an affordable health insurance option with high quality benefits is a top priority for the Ohio Dental Association Services Corp.” said Dr. Thomas Matanzo, who is a former ODASC chair, past ODA president, ODA Wellness Trust board member and an enrollee in the plan. “Having access to the ODA Wellness Trust is a huge benefit of membership, as otherwise dentists would have to go into the marketplace to find employer insurance or send their employees to the federal health insurance exchange. The Wellness Trust provides an alternative that can’t be found anywhere else.”

The new plan – the Ohio Dental Association Wellness Trust – is a self-insured employer plan that will allow participants to avoid some of the regulations and requirements of the Affordable Care Act. The Wellness Trust is a private, dentist-owned, self-funded health benefit plan, developed by ODA member dentists for ODA member dentists and their staffs to provide high quality health insurance at affordable rates.

Advantages of a self-insured health insurance plan include the ability to design plan and deductible options, choose networks and features, and keep costs low by avoiding the state insurance premium tax and many of the ACA’s mandated taxes. According to industry research, a typical self-insured group can expect to save more than 10 percent (versus traditional health insurance) without having to sacrifice quality of care.

The best time to enroll in a new health insurance plan is generally during the open enrollment period toward the end of the year, so now is a great time for offices to start researching health insurance options.

The changing health care environment has affected the way many employers offer health insurance benefits. When considering the ODA Wellness trust, offices should take several things into consideration depending on their current insurance situation.

Offices that currently offer an individual health insurance plan

Traditionally many dental offices and small businesses have offered their employees individual policies and paid a portion of the premium. Because of recent changes with the ACA and IRS, employers can no longer use pre-tax dollars to pay for insurance premiums of individual insurance plans.

Paying directly for an employee’s individual health insurance plans puts the employer out of compliance with IRS regulations and may subject the employer to a $100/day excise tax per applicable employee (which is $36,500 per year, per employee) under section 4980D of the Internal Revenue Code.

The Wellness Trust is an employer plan, which means premium costs can be purchased through a payroll deduction. An employer plan must be offered to all full-time employees.

The employer is not required to make any contribution toward the premiums. The employer can if it so chooses to pay a percent or flat dollar amount for each employee, but it is not required.

Even if an employer chooses not to make a contribution toward the premium, there are benefits to offering an employer plan. Health insurance premiums purchased through a payroll deduction can be paid with pre-tax dollars. The employee gets a tax break on the premiums of a least 15 percent.  By paying for health insurance with pre-tax dollars, the employee does not pay federal, state or social security taxes on the cost of his or her insurance. The employer saves the social security matching tax too.

Offices that currently offer an employer health insurance plan

Offices that currently offer an employer health insurance plan may be able to save money through the ODA Wellness Trust. Self-insured plans are not subject to the state premium tax, which is about a 3 percent savings. According to the National Association of Self-Insured Plans, a typical self-insured group can expect to save more than 10 percent versus traditional health insurance. Additionally, because the plan is restricted to dental professionals who typically lead healthy lifestyles, the ODA Wellness Trust will likely see lower health insurance premium rates than the general population.

Offices that do not currently offer a health insurance plan

The ACA has caused more dentists to consider offering a plan to their employees because everyone is required to have health insurance. Additionally, it is oftentimes costly to add a spouse onto a health insurance plan, so many people who had previously been on a spouse’s insurance plan are now looking to their employers for health insurance.

The ODA Wellness Trust must be offered to all full-time employees because it is considered an employer plan, but the employer is not required to make any contribution to the premium. ODA Wellness Trust health insurance premiums purchased through a payroll deduction can be paid with pre-tax dollars, which helps save money by avoiding federal, state or social security taxes and the employer social security matching tax.

How can I learn more?

For more information on the specifics of the ODA Wellness Trust and to enroll in the plan, visit www.oda.org/insurance or call an ODASC representative at (800) 282-1526.

This article is intended to provide general information and should not be construed as providing tax or legal advice. Dentists should always seek the advice of their own legal and/or tax advisors regarding their own specific circumstances.