FAQ

Who manages the costs of dental care if there is no insurance company involved?

First, do dental costs even need management by an insurance company when the average dental plan claim cost per person per year is only $250? Second, the patient is typically responsible for a portion of the dental services provided, which encourages them to become good consumers for dental services like any other commodity or service.  
 
 

If Direct Reimbursement works so well, why haven't we heard of it?

DR is a plan concept, not an insurance product, and is typically administered by a Third Party Administrator. There is no national sales force or insurance company promotion. Also, DR allocates more plan dollars to dental care and less plan dollars to administration & compensation than any other dental plan. While brokers may be less inclined to introduce the plan to employers, DR is widely recommended by benefit consultants. There are approximately 4,000 employers nationwide using dollar based plan designs.  
 
 

Isn't it true that Direct Reimbursement patients must first pay the dentist, and wait to be reimbursed?

No. The majority of dentits will accept an assignment of benefits that allows dentists to file claims on behalf of the patient. Ninety-five percent of all claim checks are written directly to the dentist.  
 
 

If an employer already has a self-funded dental plan, why would they move to DR?

Many DR clients were self-funded before moving to DR. Their motivation was two-fold:

1. Value. No monthly administrative fees charged under Direct Reimbursement.
2. Simplicity: Easy to understand dollar-based plan designs. No deductibles, UCR provisions, pre-determination, frequency of care limitations, etc.

How much savings can be realized with DR over traditional fully insured plans?

Actually, claim costs can be comparable to the typical fully insured indemnity plan design (100/80/50/50). However, fully insured plans normally pay 52-54% of total submitted charges and retain 30-40% of premium dollars, whereas DR plans pay an average 60-65% of total submitted charges (pre-tax) and retain approximately 10% of paid claims. Any funds remaining in the reserve fund at year-end belong to the employer.  
 
 Won't our claims cost increase as more services are covered under Direct Reimbursement?

It's true that more procedures are covered. Plan design can be designed to produce specific claim cost outcomes. Employers can determine their own exclusions or payment caps on benefits, setting their own schedule of benefits.  
 
 We have PPO "discounts" now and don't want to give them up.

We maintain that premium retention (30-40%) associated with most PPO type plans far outweigh the 8% savings (average) realized via utilization of PPO networks. Also, DR plans can be offered alongside managed care plans, usually as a buy up option.  
 
 What makes DR a better value than other self-insured dental plans?

Simple dollar-based plan designs versus complicated procedure-driven plan designs. Also, most importantly, administrative costs are paid based on what is actually spent by the plan.  

To what do you attribute such high client retention?

Freedom of choice regarding dentist & treatment makes the plan very attractive to employees. Simplicity of dollar-based plan design makes plan easy to understand and use. Value realized when higher percentage of total claims is paid via plan using pre-tax dollars.

Who are some employers utilizing dollar based plan designs? *