Dental Benefit Plans

Employers and other plan sponsors offer dental benefits for a variety of reasons, including promotion of oral health and attraction and retention of high-quality employees.

Regardless of why the plan is offered, its intent is the same: to help individuals by paying for a portion of the cost of their dental care.

Almost all dental benefit plans are the result of a contract between the plan sponsor (usually an employer or a union) and the third party (usually an insurance company). For this reason, concerns about your dental plan should first be directed to your plan sponsor.

Limitations in coverage are the result of the financial commitment the plan sponsor has agreed to make and the benefits the third-party payer will offer in exchange for that commitment.

Treatment decisions must be made by you and your dentist. While dental benefit coverage should be taken into account, it should not be the deciding factor in your choice of treatment.

How Benefits Are Determined

You should know how your plan is designed, since this can affect significantly the plan's coverage and your out-of-pocket expense.

Some employers now offer more than one dental plan to their employees. To understand and make decisions about your dental benefits, it is important to remember that plans are often very different. To make the best decision for you and your family, you should understand exactly how the different kinds of dental benefit plans work and how they derive their cost savings.

There are many ways to design a dental benefits plan. Although the individual features of plans may differ somewhat, the most common designs can be grouped into the following categories:

Direct Reimbursement programs

Direct Reimbursement programs reimburse patients a percentage of the dollar amount spent on dental care, regardless of treatment category. This method typically does not exclude coverage based on the type of treatment needed and allows the patients to go to the dentist of their choice. More about Direct Reimbursement...

"Usual, Customary and Reasonable" (UCR) programs

"Usual, Customary and Reasonable" (UCR) programs usually allow patients to go to the dentist of their choice. These plans pay a set percentage of the dentist's fee or the plan administrator's "reasonable" or "customary" fee limit, whichever is less. These limits are the result of a contract between the plan purchaser and the third-party payer. Although these limits are called "customary," they may or may not accurately reflect the fees that area dentists charge. There is wide fluctuation and lack of government regulation on how a plan determines the "customary" fee level.

Table or Schedule of Allowance programs

Table or Schedule of Allowance programs determine a list of covered services with an assigned dollar amount. That dollar amount represents just how much the plan will pay for those services that are covered. Most often, it does not represent the dentist's full charge for those services. The patient pays the difference.

Preferred Provider Organization (PPO) programs

Preferred Provider Organization (PPO) programs are plans under which contracting dentists agree to discount their fees as a financial incentive for patients to select their practices. If the patient's dentist of choice does not participate in the plan, the patient will have a reduction or complete loss of benefits.

Capitation programs

Capitation programs pay contracted dentists a fixed amount (usually on a monthly basis) per enrolled family or patient. In return, the dentists agree to provide specific types of treatment to the patients at no charge (for some treatments there may be a patient copayment). The capitation premium that is paid may differ greatly from the amount the plan provides for the patient's actual dental care.

More on Direct Reimbursement

How Does Direct Reimbursement (DR) Work?

DR works much like reimbursement for employee expense accounts. In fact, administration is as easy as A-B-C:

    * A. Employee and/or covered dependents receive treatment from a dentist of their choice.
    * B. The employee pays the dentist's bill and presents a paid receipt or proof of treatment to the employer or third-party administrator.
    * C. The employee is reimbursed according to the plan design that you choose to meet the company's needs.

With DR:

    * Money is spent when employees receive dental services, so 90-95% of every benefit dollar goes toward dental treatment.
    * There are no complex claim procedures or forms to complete.
    * Administrative overhead is reduced.
    * Employees are free to choose their own dentists.