Index | Dental Insurance | Direct Reimbursement (DR) Plan
Direct Reimbursement (DR) Plan
A Direct Reimbursement Plan is a dental insurance plan which is self-funded. It is usually established by the employer or a company sponsor using the contributions of both the employer and the employee. It is often considered to be a perfect design for the employer to offer to the employees.
In most cases, with a Direct Reimbursement Plan you can see any dentist without a necessity to appeal only to network providers. For many people it is an indisputable advantage of Direct Reimbursement Plans that they are free to choose their own dentist. Usually the insured pays the dentist directly for the services performed and receives a receipt where the performed dental procedures, the date of the treatment and the associated costs are listed. Then, as soon as the employee submits the receipt or proof of treatment to the employer or an administrator, the latter reimburses the employee a fixed percentage of the dental care costs according to the plan's design. Usually it takes about a week for the employee to receive reimbursement after submitting the claim to the employer.
Though, there can be another scenario: some employers prefer paying the dentist directly, thus limiting out-of-pocket expenses of the employees. Convenient as it is for the employee, such is quite a rare case. Therefore, what you should be ready for is that under a Direct Reimbursement Plan you are normally asked to pay the costs associated with your dental treatment up front.
On average, a Direct Reimbursement Plan will reimburse 100% of the first $100 a policyholder spends on dental care, 80% of the next $500 and 50% of the next $1,000. The design of a Direct Reimbursement Plan is chosen by the employer so that it could fit the company's budget. So, each company can tailor the scope of the benefits offered and Direct Reimbursement Plans funded by different companies vary considerably. Of course, in most cases this type of a dental plan is efficient for the employer because he/she pays not for each employee irrespective of the scope of treatment the latter receives like it is the practice with DHMO plans, but reimburses the actual dental care expenses the employees incur. At the same time it should be noted that a Direct Reimbursement Plan can turn out non-profitable for small businesses with limited budgets to spend on the employees' dental care.
When it comes to the potential disadvantages of this plan for the employee, it is important to mention that with a Direct Reimbursement Plan you do run a risk that your insurance provider will refuse to reimburse your dental care expenses on your claim. Direct Reimbursement Plans operate as a trilateral agreement of the insurance provider, the employer and the employee, and the employer can negotiate the conditions for reimbursement when setting up a plan. In this respect with Indemnity Plans in which your insurance company usually pays a claim directly, not through the employer as a third party, the risk of non-reimbursement is smaller.
Still, a Direct Reimbursement Plan provides a number of benefits for the employee. The distinct advantage of Direct Reimbursement Plans is that they eliminate many of the administrative charges and, in effect, more money goes to dental treatment as such. It offers simplicity and efficiency in terms of receiving reimbursement and is designed to eliminate the amount of paper work policyholders generally have to do with other dental plans. Besides, there are no monthly premiums required to keep this plan in force. Usually there are no deductibles either. However, you should expect that the plan, most likely, limits the dollar amount the employee may spend on dental treatment. Besides, with a Direct Reimbursement Plan there are usually no exclusions (such as the missing tooth exclusion), which also adds to the convenience of the patient. Besides, the scope of coverage offered by Direct Reimbursement Plans is wider than that of most dental plans. Direct Reimbursement Plans cover even cosmetic services.
It is a well-acknowledged postulate that choosing a Dental Insurance plan is very important and understanding different types of Dental Insurance plans will certainly make the process of selecting an appropriate plan easier. Direct Reimbursement Plans enjoy great popularity throughout the US nowadays because they are an effective way to provide Dental Insurance to the employees that gives them freedom to choose any dentist of their own accord and in cooperation with the chosen dentist to take an active role in planning dental treatment which would be the most appropriate for maintaining dental health.