Sun may be setting on traditional vision insurance
Insurers offer discount plans linking vision to dental coverage
By Charles Rathmann, of SBT
As general health insurance costs continue to skyrocket, fewer employers are providing traditional vision insurance policies, according to industry insiders say.
Instead, vision discount cards that cost the insured as little as $1 a month are becoming more pevalent, according to Lynn Steinle of Strategic Employee Benefits Services.
"Most of the plans we have input over the last few years have been terminating the vision plan for a discount card," Steinle said. "You would get contacts, frames, lenses and an exam within 12- or 24-month periods. Then you have maximum amounts of a very narrow network within which you can seek services.
"But people would still complain that it is more expensive than going to Lenscrafters or Target or Walmart. The discount card is really giving people what they want. They can go to the lower-cost vision providers," Steinle said.
Some insurers are beginning to package discount cards for optometry services as add-ons or automatic pieces of a dental benefit.
"We are adding a vision discount program to our voluntary plans," said Jackie Bloomer of Delta Dental. "That is going to be effective right now. What that program is going to give their patients is a 20% discount on eyeglasses, contacts and other services — automatically included in their voluntary dental benefit."
The efficiencies that discount cards offer over traditional insurance policies have to do with the lack of red tape, according to Bloomer.
"Because it is a discount program, there are no claims filed," Bloomer said. "There is not really a claims processing function."
Humana Dental is also offering a vision card on a post-sale basis to its dental insurance clients, according to Humana spokesman Mark Mathis.
"Humana is barred by law from promoting vision coverage prior to the sale, but
offers it on a post-sale basis," Mathis said. "Currently, Humana Dental offers vision discount programs from Cole Managed Vision and TruVision to our dental members."
According to Mathis, changes in the company’s vision discount offerings may be pending.
However, Tom Witter, president of Milwaukee-based Vision Insurance Plan of America, says benefits including vision insurance still play a significant role in employee retention.
"Attracting and retaining employees is important," Witter said. "In this business climate, it might not be quite as important as it was a year ago, with more people out there looking for work than there were a year ago. But I think these types of programs help employers to improve employee relations across the board – by and large at no cost to the employer."
The fact that ancillary benefits including vision insurance need to come at no cost to the employer can either help or hurt employer-funded vision insurance, according to Witter.
"The fact that everyone is focusing on reducing medical costs makes vision insurance appear very affordable," Witter said. "Even if they do sponsor a plan, the voluntary benefits are reasonably low cost, compared to the medical plans."
In fact, according to Witter, some employers may be beefing up ancillary benefits including vision to compensate for higher employee contributions for health insurance.
"The ancillary benefits are becoming more popular right now," Witter said. "We are experiencing strong growth. It is an attempt to keep the overall benefits package attractive in the face of rising medical costs."
Traditional vision insurance has become the vanguard of large union employers, according to Chris Lenchzner, chief financial officer for Wisconsin Vision, which operates 18 retail optometry locations in Wisconsin and four in Indiana.
"We have four and a half positions devoted to processing claims," Lenchzner said. "Over the last few years, it has remained fairly constant, but we have improved our efficiency. About 70% to 80% of our business comes from unions. But it seems like more people are getting out of self-funded vision plans."
What that means to Lenchzner is her claims processors are dealing more with large insurers such as Cole Vision Insurance and Eye Med, and those insurers appear to Lenchzner to be deliberately obstructing the claim-filing process.
"People are still using their benefits and still have their vision benefits," Lenchzner said. "The insurance companies are coming up with these crazy rules in order to get them processed. … Insurance companies do everything they can to not pay. A lot of times, they say they don’t receive a claim. But how can they have some and not others that were sent at the same time?"
June 13, 2003 Small Business Times, Milwaukee
