Annual Report 2014
With great teeth,
anything is possible

Read the President’s Message
Girl playing tug of war while holding a rope with her teeth and reading a book. With great teeth, anything is possible.

President’s Message

A healthy smile reflects your overall well-being. You can’t feel truly great if your dental health isn’t the best – that’s the thinking behind our recent ad campaign (“Choose greatness”). And while we don’t recommend that you play tug of war with your teeth, we want to make it easier for everyone to take the steps necessary for a healthy smile – which includes having a great dental plan.

This idea of working for well-being comes to mind when I consider our efforts to bring standalone dental products to the exchanges under the Affordable Care Act (ACA). With the federal government’s (and various states’) very complex and ever-shifting regulations for pediatric dental coverage – both on and off the exchanges – and the short timelines for filing and certifying these products, we can be proud of our dedicated staff who worked long hours to make our products available across the country.

Based on our enrollment in 2014, we became by far the largest standalone dental plan participating in the exchanges. We garnered an initial quarter million enrollees in 27 states and, by the second enrollment period, our public exchange enrollment increased by 30%. With health plan partners across the country, enrollment grew by another 300,000 in ACA-compliant dental plans outside the exchanges. With the addition of 13 more states in 2015, we expect enrollment to grow significantly both inside and outside the exchanges.

At the end of 2015, I will be retiring after 15 years as President and CEO of this enterprise and 22 years as CEO of the New York/Pennsylvania Delta Dental Plans. Anthony Barth, executive vice president and chief operating officer, is sharing responsibility as president, continuing as chief operating officer throughout 2015 and will officially take over as president and CEO on January 1, 2016. Mr. Barth has been with Delta Dental for 27 years and has been working with me on every substantial decision we’ve made for the company for the past 14 years, so I know he will keep our organization in its upward trajectory. Working with Delta Dental has been most rewarding and educational – I’ve enjoyed witnessing the growth of our companies and the host of changes in the dental benefits industry and the world of business.

Please see this report for highlights of 2014 and how we demonstrate that with great teeth, anything is possible.

Gary Radine, President and CEO

Gary D. Radine
President & CEO


New business

We gained almost 5 million enrollees in 2014. Almost every sector of our business experienced an increase.


Today’s consumer is looking for fast self-service options, and we deliver with a suite of online tools.


Dentistry is slowly evolving beyond the surgical “drill and fill” approach for treating tooth decay to a risk-based disease management model.


We contributed more than $5.5 million in 2014 through our Community Care Foundation and Health, Education and Research Fund.

New business

We gained almost 5 million enrollees in 2014. While some of that growth came from our expanded presence on public exchanges, almost every sector of our business experienced an increase – including commercial business from employer groups, exchanges in the private sector and government programs.

Government programs

We were awarded a 10-year contract to provide dental services for employees of the Office of the Comptroller of the Currency. We were able to provide customer service in less than 45 days for this 10,000-life group, with full implementation in 90 days.

We welcomed the Federal Employees Dental and Vision Insurance Program (FEDVIP) in 2013, which serves federal civilian employees, retirees and their families. In our second open enrollment season, we saw a 50% increase in enrollment to this voluntary plan, which now covers 100,000 people around the country. Delta Dental has administered Denti-Cal, the dental portion of California’s Medicaid plan, for 40 years. In 2014, enrollment increased by 40% with the addition of more than 3.2 million enrollees.


Our affiliate company in Mexico reached a milestone in 2014 – surpassing one million enrollees. We completed most of the testing needed to convert this company’s processing functions to our enterprise system, which will launch in 2015. Recruitment efforts have resulted in a dental network of more than 4,500 offices and, as of the end of the year, we had completed 3,000 on-site evaluations to ensure quality. We also offer vision benefits through this company, with 1,000 points of service throughout Mexico.

Puerto Rico

We increased our ownership to majority status with Delta Dental of Puerto Rico and continue to be pleased with our progress there. This company, which covers a quarter million enrollees, recently introduced an individual plan to its product portfolio.


For benefits administrators and enrollees

Today’s consumer is looking for fast self-service options, and we deliver with a suite of online tools for benefits administrators and enrollees. In 2014, we fully integrated our new technology platform, allowing for consistent functionality across all of our products. Benefits administrators now enjoy upgraded online enrollment and billing functions, and enrollees have access to more detailed benefits information, among other enhancements. We also launched a new platform that streamlines the workflow of recruiting, credentialing and servicing our network dentists, to make new Delta Dental dentists available even sooner to enrollees.

Status of claims, electronic ID cards, benefits information optimized for mobile devices – these are just some of the functions available to enrollees. With a growing number of enrollees, many new to dental coverage due to health care reform, we received a record-breaking 20.9 million phone calls in 2014. We are adding to our suite of self-service tools an enhanced interactive voice response (IVR) telephone system and took the first step in 2014 by consolidating DeltaCare® USA calls into our enterprise IVR. Adding new phone functionality is just one of the ways we are working to enhance the customer experience.

For providers

We introduced online Provider Tools in 2013, which notably brought real-time claims submission to the dental office, allowing many claims to be processed while the patient is in the office. This year we added a new feature that integrates dental offices’ practice management systems, to even further expedite the claim submission process.


Risk assessments

Dentistry is slowly evolving beyond the surgical “drill and fill” approach for treating tooth decay, towards a risk-based disease management model known as CAMBRA (Caries Management by Risk Assessment). Dentists can use a risk assessment tool to identify indicators of dental disease and risk factors, and then apply individualized preventive techniques. In 2014, we collaborated with the University of California San Francisco (UCSF) School of Dentistry on a follow-up survey to one issued in 2006 that will determine if dentists are increasing their use of risk assessments for their patients. We hope to better understand any barriers to adopting this model for combating tooth decay.

The American Dental Association adopted new procedure codes for risk assessments in 2014 and, in 2015, we began reimbursing dentists for this procedure. We expect an increase in the utilization of these new procedure codes and CAMBRA-related techniques under this new reimbursement model. We also offer enrollees a clinically validated risk self-assessment tool on our website, and encourage them to take the results to their dentist for discussion. Claims analysis will help us determine if dentists are incorporating risk assessments into daily practice.


Helping at-risk populations

We contributed more than $5.5 million in 2014 through our Community Care Foundation and Health, Education and Research Fund. The Community Care Foundation provides annual grants to dental clinics in our 15-state and District of Columbia enterprise area that provide care to the underserved. These include federally qualified health centers (FQHCs), community clinics, Missions of Mercy and school-based and mobile clinics that work with vulnerable populations in both urban and rural settings. Through the Health, Education and Research Fund, we support research projects, dental education and outreach, fundraising events and other efforts that increase access to care. One organization we supported in 2014 is the National Children’s Oral Health Foundation America’s ToothFairy®, which provides community-based education and outreach to prevent tooth decay for at-risk children. This effort focuses on expanding access to care, increasing oral health resources and education, and promoting overall health and wellness for disadvantaged children across the U.S.

Untreated tooth decay is nearly twice as common among Hispanic primary school children compared to non-Hispanic whites, according to the National Health and Nutrition Examination Survey. El Ratoncito Pérez, the Tooth Fairy’s Hispanic equivalent, helps us educate children about dental wellness in a fun, engaging way. Through our Hispanic dental wellness and education initiative, El Ratoncito Pérez visited public schools in Dallas-Fort Worth, Miami-Dade County, Atlanta and Houston, reaching more than 5,000 elementary-aged children.

Helping dental students

Recognizing up-and-coming dental leaders has always been important to our mission. That’s why we established the Student Leadership Awards, given annually to 65 exceptional students attending 19 dental schools around the country. Students are chosen for their academic achievements as well as commitment to community service and demonstrated leadership skills.

We also have a loan-scholarship program that helps dental students through the financial hardship of dental school while also aiding communities in need of professional dental services. Under this program, we provide a loan with the opportunity to have repayment forgiven when the graduating student practices part-time in an underserved community. Each year part of the loan is forgiven, and no repayment is required after four years.


Network expansion

Our dentist networks increase every year, making them some of the largest in the nation.

  Dentist locations % growth Turnover
Delta Dental Premier®: 328,000 1.35% 0.67%
Delta Dental PPOSM: 248,000 4.78% 1.44%
DeltaCare® USA: 68,000 9.32% 1.73%

Enrollment growth

From commercial and exchange business to government-sponsored programs, all of our business sectors grew in 2014.

2014 survey results:


Enrollees retained


Enrollee satisfaction*


Clients retained


Client satisfaction **


Ease of doing business with Delta Dental


Would recommend Delta Dental to other organizations

* Represents responses from 8,000 surveys

** Represents responses from 2,600 surveys

2015 projected:

32.2 million


31.2 million


26.6 million


25 million


25 million


24.2 million


A jump in enrollment means increased claims and calls, and our new systems help us maintain high levels of quality and service.

42.5 million

Claims processed


Accuracy rate of claim payments

20.9 million

Calls answered


Percentage resolved on first call

Product enrollment

Both our PPO and dental HMO plans experienced growth in 2014 with expansion opportunities from the Affordable Care Act.

Product enrollment chart

Open network plans

Closed network plans

Cost management

Reduction of dentist fees and non-billable services accounted for $2.4 billion in savings for clients and enrollees in 2014. An additional $9 million was saved in other ways, such as identifying duplicate claims. Nearly 89 cents of every premium dollar goes directly to dental services.

$13 billion

Total submitted

$3.3 billion

Savings (25% of submitted amount)


Benefits Selling magazine Readers’ Choice Awards (brokers vote on industry favorites)

Best Dental Carrier

6thconsecutive win

9thwin in 10 years

“…brokers love Delta Dental for its especially exhaustive research and customer service.”

Willis Quality Index® (benchmarking tool of insurer/reinsurer performance; feedback from 300 Willis Associates)

5-star rating 5-star rating

(highest available) for Delta Dental Insurance Company

Criteria considered: Underwriting, network access, cost containment, new business process, service

Of 15 dental carriers, Delta Dental scored the highest in every category.

A.M. Best ratings reaffirmed


Delta Dental of California
Delta Dental Insurance Company


Delta Dental of Pennsylvania
Delta Dental of New York

TOBY Earth Awards (sponsored by the Building Owners and Managers Association)
Our Alpharetta, GA office building won local and regional Outstanding Building of the Year awards.

Criteria considered: Sustainable practices, recycling efforts, energy reduction, ENERGY STAR and LEED Platinum certification


55 ton paper reduction in 2014 (34% decrease since 2012) = reductions of:

80 metric tons

of carbon dioxide equivalency

639,000 gallons

of water

32 tons

of solid waste

Courtesy of Environmental Paper Network

2.5 million

paper documents saved from enrollees and dentists who opted for electronic delivery


We experienced positive growth in 2014 – from public and private exchanges, commercial business and government programs.

The following selected financial data have been derived from Enterprise Companies’ financial statements.

Balance sheets

Condensed Combined Financial Statements
Combined Balance Sheets
December 31, 2014 and 2013
(in thousands)

  2014 2013
Cash and cash equivalents $ 228,848 $ 259,866
Marketable securities 924,669 822,444
Receivables 551,925 467,550
Property and equipment, net 246,344 250,685
Other assets 75,696 74,846
  $2,027,482 $1,875,391
Liabilities and general reserves
Unpaid claims and claims adjustment expenses $ 446,314 $ 427,721
Accounts payable and accrued expenses 286,972 283,034
Deferred revenue 78,160 71,796
Refundable customer balances 163,809 162,877
Accrued retirement benefits 65,835 70,817
Other liabilities 60,223 59,309
  1,101,313 1,075,554
General reserves 926,169 799,837
  $2,027,482 $1,875,391

Income Statements

Condensed Combined Financial Statements
Combined Statements of Income and Expense and General Reserves
December 31, 2014 and 2013
(In thousands)

  2014 2013
Commercial customers $ 6,252,654 $ 6,005,134
State and federal programs 1,541,399 1,129,384
Investment income 25,827 20,410
Other income (expense), net 36,389 (6,195)
  7,856,269 7,148,733
Professional dental services 6,873,567 6,257,169
Administrative 868,736 780,595
  7,742,303 7,037,764
Net income 113,966 110,969
Unrealized gain on securities 10,498 25,954
Pension liability and post-retirement adjustments 9,395 16,803
Dividends paid (7,527)
General reserves at beginning of year 799,837 646,111
General reserves at end of year $ 926,169 $ 799,837