Dental Insurance
--------------------------------------------------------------------------------
Overview
Considered an attractive benefit by most employees, dental
insurance operates in much the same way as health insurance.
In fact, it can often be purchased in addition to basic
medical care, or it can be purchased as a separate policy
from a separate provider.
Dental coverage, or a dental benefits plan, reimburses
the policyholder for certain dental expenses according
to written agreement. Because most dental diseases are
preventable (unlike many medical diseases, which can be
unpredictable and catastrophic), most dental benefits
plans are structured to encourage patients to obtain the
regular, routine care that is vital to prevention and
diagnosis.
This emphasis on prevention is reinforced by most plans,
which require the patient pay a greater portion of the
costs for treatment of dental disease than for preventive
procedures. Dental premiums usually vary from about $10
a month for a single person to $71 for a family.
--------------------------------------------------------------------------------
Making Choices
Some plans allow you to choose your own dentist. Others,
in exchange for lower rates, limit your choice. Although
the opportunity to choose a dentist is only one factor
in the decision to choose a plan, it is a good idea to
note the difference between the two alternatives:
Open Panel/Freedom of Choice. Allows covered patients
to receive care from any dentist and allows any dentist
to participate. Dentists may accept or refuse to treat
patients enrolled in the plan. Coverage with this feature
allows you to receive full benefits for treatment provided
by any dentist of your choice.
Closed Panel. Allows covered patients to receive care
only from dentists who have signed a contract of participation
with the third party. The third party contracts with a
certain percentage of dentists within a particular geographic
area, who in turn offer lower rates to the patient.
--------------------------------------------------------------------------------
Coverage
To control dental treatment costs, most plans will limit
the amount of care a patient can receive in a given year
through a variety of methods. They may place a dollar
" cap" or limit the amount of benefits, or may
restrict the number or type of services that are covered.
The exclusion of certain services or treatments is also
a method of reducing costs. Be sure to investigate exactly
what services the plan covers and excludes, including
special administrative services available to both purchasers
and participants.
--------------------------------------------------------------------------------
Major Plan Types
Indemnity Plans
Indemnity plans are traditional fee-for-service based
plans. Normally, the employee pays a monthly premium to
the insurance company, which covers a portion of his or
her dental expenses. A high predetermined deductible is
usually required before the insurer will begin paying
for care, though you usually have the freedom to choose
your own dentist. Preventative service costs are normally
covered by the plan, which typically pays 100% of the
preventative costs, 80% for common restorative services
and 50% for major treatments, such as crowns and orthodontics.
The remaining costs are paid by the patient through a
variety of fee schedules. Most indemnity plans limit the
annual dollar amount on benefits, however, and may apply
probationary periods on procedures that could last up
to a year. The average monthly cost of an indemnity plan
is between $19 and $25.
Dental HMOs
Also known as capitation plans, dental HMOs (DHMOs),
are normally characterized by monthly premiums, free preventative
or routine care, small co-payments for office visits,
and selection from an approved network of dentists. The
dentist is paid on a per capita (per head) basis rather
than for the treatment provided. Contracting dentists
-- those within the approved network -- receive a fixed
monthly fee per patient regardless of whether treatment
is performed. Patients may be referred to a specialist
who also contracts with the plan, but they must pay in
full if they use a dentist outside of the network. Other
characteristics of these plans are possible initial enrollment
fees and annual dollar caps. These plans cost on average
from $6 to $15 monthly.
Preferred Provider Organizations (PPOs)
Preferred Provider Organizations (PPOs) are somewhere
between an indemnity plan and a dental HMO. Within this
plan, a defined panel of dentists provide services at
a discounted rate as long as you stay in their network.
If you go outside the approved network of dentists, you
will pay higher deductibles and co-payments. Typically,
PPOs have monthly premiums and may have an annual dollar
cap. The average monthly cost is $20.
Discount Dental Plans/Referral Plans
Discount dental plans, or referral plans, are the most
widely available to individuals. Participants of these
plans must use a participating dentist, who has agreed
to offer services at a discounted rate. Typically, you
pay an initial enrollment fee as well as a monthly fee
to the discount company through which your discount is
secured. Although discount plans work very well for many
individuals seeking coverage, they are not regulated by
insurance departments. Consumers are cautioned to research
the history and legitimacy of these plans before providing
to them their highly personal and secure information.
The average monthly cost is $5 to $10.
Direct Reimbursement Plans
A direct reimbursement plan is a self-funded benefit
plan and is not considered an insurance plan. In most
instances, an employer or company sponsor pays for dental
care with its own funds, rather than paying premiums to
an insurance company or third-party administrator. The
patient pays the full amount to the dentist, gets a receipt
for the employer, who reimburses them for part or all
of the dental costs, depending upon the patients specific
benefits. Typically, there are no monthly premiums. Cost
depends on the number of employees, and participants have
the freedom to choose any dentist they wish. Benefits
are usually capped at $500 to $1,500 annually and the
company may place a limit on how much an employee can
spend on dental care within a given year. Often, though,
there is no limit on services provided. Under this plan,
the patient is reimbursed a percent of the dollar amount
spent on dental care, regardless of the treatment category.
Dental Insurance 
