This appears to simply be like an elaborate capacitance meter, so if you cover the electrode with a dielectric, it will still work. It is probably best of you don't use a thick dielectric or you will reduce the change in capacitance when the finger comes close or touches. For this reason, you probably do want the dielectric to touch rather than float above the electrode. I'm wondering why you will cover the electrode with a dielectric at all. This is like putting another capacitor in series which reduces the overall sensitivity doesn't it?