Dental Plan Redesign Removes Preventive Services From Annual Limits

California state employees' Delta Dental PPO plans now exclude preventive and basic dental services from counting against annual maximums, effective January 1, 2026. Checkups, cleanings, and basic dental treatments no longer deplete the annual coverage limit, allowing employees to reserve their full annual maximum for restorative and major services like crowns, root canals, and bridges. This plan design change affects both Delta Dental PPO Basic and Enhanced plans for California state employees and participating employers, creating a model that New York employers should evaluate for their own dental benefit strategies.

Traditional dental insurance annual maximums typically range from $1,000 to $2,000 per year and have remained largely unchanged since the 1970s despite healthcare cost inflation. When preventive services count against these maximums, employees often delay necessary routine care to preserve coverage for unexpected major procedures. California's restructured approach removes this financial barrier by separating preventive care from the annual limit calculation.

How the Redesigned Coverage Works

Under the new structure, employees receive full coverage for preventive and diagnostic services without any impact on their annual maximum benefits. Routine cleanings, examinations, X-rays, and basic treatments like fillings don't reduce the available coverage for major procedures. This means employees with $1,500 annual maximums can use the entire amount for crowns, bridges, or other expensive treatments while still receiving preventive care throughout the year.

Cal Poly and other California public employers are implementing similar exclusions for diagnostic and preventive services when employees use PPO dentists. Dependents on Delta Dental Basic plans also receive enhanced coverage under the 2026 changes, extending the benefits beyond just primary employees.

The restructure addresses a fundamental flaw in traditional dental benefit design where employees faced perverse incentives to skip preventive care. By removing preventive services from annual maximums, dental insurance plan design now aligns financial incentives with optimal oral health outcomes.

Employer Cost and Utilization Implications

This plan design change may actually reduce long-term dental costs by encouraging early intervention and preventive care. Employees who maintain regular dental visits are more likely to catch problems early when treatments are less expensive and complex. The American Dental Association has long advocated for employers to evaluate dental benefit plans and increase annual maximums, which have not kept pace with inflation over the past five decades.

New York employers should consider whether similar exclusions could improve employee utilization and health outcomes. Employees are more likely to maintain regular dental visits when preventive care doesn't reduce coverage for unexpected major procedures. This behavioral change can lead to better oral health and potentially lower overall dental costs over time.

The restructure also addresses employee confusion about dental benefits. Many employees don't fully understand how annual maximums work or realize that routine cleanings reduce their available coverage for major procedures. Clear separation of preventive and major service coverage simplifies benefit communication and helps employees make better healthcare decisions.

Implementation Considerations for Multi-State Employers

Multi-state employers may face complexity if implementing different plan designs across locations. However, the California model demonstrates that carriers can accommodate these structural changes without significant administrative burden. Employers should evaluate whether their current dental carriers can provide similar plan designs or if alternative providers might offer more flexible options.

Documentation becomes critical when implementing non-standard plan designs. Plan documentation and compliance procedures must clearly explain how preventive services are handled differently from other coverage categories. Employee communications require updates to ensure workers understand the enhanced preventive coverage and how it affects their annual maximum utilization.

Employers considering this approach should verify that their dental carriers can provide accurate claims processing and member communications. Separating preventive services from annual maximums requires carrier systems capable of tracking different coverage categories and applying appropriate benefit structures.

Market Trends Toward Value-Based Dental Design

California's approach represents a broader market trend toward value-based dental benefit design that prioritizes prevention over treatment restriction. The American Dental Association created an employer benefit toolkit available at ADA.org/employerbenefittoolkit to help employers understand and evaluate dental plans. The ADA also advocates for dental loss ratio legislation to ensure a higher percentage of premium dollars goes toward patient care rather than administrative overhead.

This shift reflects growing recognition that traditional dental benefit structures may inadvertently discourage the preventive care that reduces long-term costs. Industry experts note that annual maximums have become increasingly inadequate as dental treatment costs have risen while benefit limits remained static.

For New York employers competing for talent, enhanced dental benefits can provide differentiation in the marketplace. Employees increasingly value comprehensive healthcare benefits, and dental coverage that removes barriers to preventive care demonstrates employer commitment to workforce health and financial protection.

Operational Action Items for New York Employers

Employers should immediately evaluate their current dental plan structures to understand how preventive services affect annual maximums. Review recent utilization data to identify employees who may be delaying preventive care due to annual maximum concerns. This analysis provides baseline data for measuring improvement if plan design changes are implemented.

Contact current dental carriers to explore options for excluding preventive services from annual maximums. Not all carriers may offer this flexibility, making it important to understand available alternatives during renewal discussions. Document carrier responses and capabilities for future reference during competitive evaluations.

Review employee communications and benefit summaries to ensure accurate explanation of current dental coverage structure. Many employees don't understand how annual maximums work, creating opportunities to improve benefit education regardless of whether plan design changes occur.

Consider timing any plan design changes with annual renewal periods to minimize disruption and maximize communication opportunities. Employees need clear explanations of how enhanced preventive coverage affects their dental benefit utilization and financial planning.

Long-Term Strategic Considerations

The California model may influence dental benefit design trends nationwide as other state and local governments evaluate similar approaches. Employers who adopt preventive care exclusions early may gain competitive advantages in recruitment and retention while potentially reducing long-term dental costs through improved employee oral health.

Annual maximum increases remain another strategy for improving dental benefits, but excluding preventive services from maximums may provide better value by directly addressing utilization barriers. Employers with limited budget flexibility for premium increases should evaluate whether plan restructuring offers more employee value than simple maximum increases.

The success of California's approach will likely influence carrier product development and employer adoption nationwide. New York employers who understand these trends and evaluate their applicability can make more informed decisions about dental benefit strategies that support workforce health and satisfaction.

For employers reviewing their dental benefit offerings, the California model demonstrates that innovative plan design can remove barriers to preventive care while preserving coverage for major procedures. This approach aligns employee incentives with optimal health outcomes while potentially reducing long-term costs through improved prevention and early intervention.

Employers with questions about dental plan design strategies can reach us at info@bentonoakfield.com.

This content is for informational purposes only and does not constitute legal, tax, or benefits advice. Requirements vary based on employer size, location, and plan structure. Information is current as of 2026-02-19. Employers should consult qualified advisors for guidance on their specific circumstances.