The Way Direct Reimbursement Dental Plans Work

"When it comes time to purchase dental insurance, you may wonder what options are available. There are basically two types of dental insurance plans: direct reimbursement and traditional dental plans.

What is Direct Reimbursement?

A direct reimbursement plan is a dental insurance plan that is usually entirely funded by your employer and allows you to choose any dentist without the hassle of networks. With a direct reimbursement plan, you are reimbursed for money spent on dental work, which is not limited to specific treatments. Some employers may choose to reimburse you after you have paid for your dental work, and some may choose to pay the dentist directly leaving you with less out-of-pocket expenses.

Benefits

• You can choose any dentist.
• There are no monthly premiums to pay.
• There are usually no deductibles.
• Pre-authorization is not required.
• You can calculate your portion accurately from the treatment plan given to you by your dentist, with no hidden costs.
• A direct reimbursement dental insurance plan does not have waiting periods. For example, many traditional plans have a clause that says you have to be covered for a certain amount of time before they will pay for root canals, crowns, and other major services.
• There are no missing tooth exclusions.
• Payment is generally allowed for any type of dental procedure. Some direct reimbursement plans even cover cosmetic services, such as teeth whitening.

How It Works

As with a traditional dental insurance plan, a direct reimbursement dental insurance plan usually has a maximum yearly allowance. This means that the plan will only pay for a certain amount of dental work each year. The average yearly allowance for any type of dental plan is around $1,000 to 1,500.

A common direct reimbursement plan would pay for 100% of the first $100 spent on dental services; 80% of the next $500; and 50% of the next $1,000.

Choosing a dental insurance plan is an important decision and understanding the different types of dental insurance plans available will make this process easier, and will help you to avoid issues down the road. 

In and Out of Network Dentists

Individuals with direct reimbursement plans do not typically have to worry about networks. However, those with individual dental insurance plans do.

Most independent dental insurance plans will only pay for your dental services if you go to a contracted and participating In-Network Dentist. Find out if you are required to go to a participating dentist or if you can choose your own. If the plan requires that you see an In-Network Dentist, ask for a list of the dentists in your area with whom they are contracted so you can decide if they have a dentist you would consider seeing.