Dental Benefits 201

Oh yes, I am skipping the 101 basic stuff and getting in deep here!  Unfortunately, the general public sees very little “behind the curtain” of the dental market. A good broker/agent is going to be able to navigate the ins and outs of the below programs and determine what is best for your company.  My goal in this article is to dig a bit deeper than usual to give an in-depth perspective to what is available.

In general, dental plans can be divided into two categories: fee-for-service and managed care.

Fee-for-service dental plans

These plans are typically freedom-of-choice arrangements under which a dentist is paid for each service rendered according to the fees established by the dentist and the network utilized. 

Managed care dental plans

These programs are usually implemented to direct the utilization of dental care by

  1. Restricting the type, level and frequency of treatment.
  2. Limiting access to care.
  3. Controlling the level of reimbursement for services.

As you can well guess, these plans are going to be cheaper than your traditional PPO style of dental plan. 

Indemnity

An indemnity plan is a fully insured or self-insured plan where an assigned payment is provided for specific services, regardless of the actual charges made by the provider. Payment may be made to enrollees or, by assignment, directly to dentists.
Usual, Customary and Reasonable (UCR) indemnity plans usually allow employees to go to the dentists 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 no regulation on how a plan determines the “customary” fee level.

Dental Managed Care Plans

Preferred Provider Organization

These plans are most widely utilized today.  Why?  Everybody understands them and they are easier for a broker to sell.  Please remember, that doesn’t always mean they are the right thing.  Preferred Provider Organization (PPO) programs are plans under which patients select a dentist from a network or list of providers who have agreed, by contract, to discount their fees. In a PPO style plan there is an ability to receive treatment from a non-participating dentist (out of network). Of course, patients will be penalized with higher deductibles and co-payments.  I have said it at least a thousand times but I won’t stop now… Don’t go out of network unless an emergency situation comes up or you have no other choice.  Paying the out of network increase is just not worth it at all.  NOTE: Pay special attention to your EOB (explanation of benefits).  You may be going out of network and not know it!  A typical dental carrier will cover the gambit of dentists in your area under a normal run of the mill PPO plan.

Dental Health Maintenance Organization/ Capitation Plan

Dental Health Maintenance Organization (DHMO) plans pay contracted dentists a fixed amount (usually on a monthly basis) per enrolled family or individual, regardless of utilization. In return, the dentists agree to provide specific types of treatment to the patient at no charge (for other treatments, a co-payment is required). Theoretically, the DHMO rewards dentists who keep patients in good health, thereby keeping costs low. DHMO models typically offer the least expensive dental plans. Unfortunately, employees are not well versed in what a DHMO represents and often misuse the network thinking it is a PPO style plan.  Yes, they are less expensive but the education usually doubles in these programs because the confusion can be much more.  DHMO’s have their place and can work well for a higher population area’s or mid-tier cities.  This is due to the higher volume of dentists, which will ease the potential network issue.

4 Responses to “Dental Benefits 201”

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