> If anything it will be more expensive because of the added bureaucracy and separation of who pays from who benefits.

Yes, real insurance (like car insurance or renter's insurance) will always have an expected value that is negative - the expected sum of all future payouts must be less than the sum of all future premiums paid. So insuring against completely predictable events is never worth it unless someone else pays for it, and even then it's less efficient than if they gave you the extra money directly.

Not all dental and vision benefits are completely predictable and routine, but the overwhelming majority of covered benefits are, unlike health insurance (which isn't really "insurance", despite the fact that we use the term).

I am not an accountant, but in the US, I'm guessing that there are tax advantages to offering employees dental insurance rather than just paying employees more. This is somewhat mitigated by the fact that employees could just put money for routine teeth care into a flexible spending account. (That said, most bigger ticket dental items like crowns are typically only covered by about 50% anyway because they're often at least partially cosmetic.)