Why is it more cost effective for employers to purchase dental coverage than for employees...

Under the Total Rewards competencies of the HRPA Professional Competency Framework, HR professionals are required to design and administer group benefits that balance value and cost. Group benefit plans leverage risk pooling and economies of scale: the larger the insured group, the lower the per-member administrative load and risk premium, which translates into lower average cost than individually purchased coverage.

Why not A, C, or D? “Dividends” are not a defining feature of dental plans; “utility” is an economics concept, not a pricing mechanism; and “indexation” refers to benefit adjustments (e.g., to inflation), not to why group dental coverage costs less.

References (HRPA):

Professional Competency Framework — Total Rewards (Group Benefits): apply principles of risk pooling and economies of scale in benefits design.

HRPA Study Guide — Group Insurance Fundamentals: group purchasing reduces unit costs compared to individual insurance.