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Financing of Dental Benefits

Financing Dental Benefits

As if knowing the ins-and-outs of the various types of dental plans isn’t enough of a challenge, in order to properly handle claims, you must also be familiar with the way they are financed.

Self-Funded Plans

In a self-funded plan, the employer can determine which dental expenses will be covered and also has responsibility for plan decisions. The employer pays its employees’ claims with its own money, as the claims are incurred. A federal law known as the Employee Retirement Income Security Act of 1974 (ERISA) sets rules for most self-funded plans.

Paid Premium Plans

Paid premium dental plans are typically business arrangements between an insurance company and an employer. Most plans are designed to pay only a portion of the patient’s dental expenses. The employer pays a “fixed” premium to an insurance carrier.

Medicaid

The Medicaid program, Title XIX of the Social Security Act, provides optional dental services for adults age 21 and older. On the other hand, dental services are required for the majority of Medicaid-eligible individuals under the age of 21.

It is up to individual states to determine if their adult Medicaid-eligible population is eligible for dental services. Many states do provide emergency dental services for adults at a minimum; however, less than half provide comprehensive dental care. There are no minimum requirements for adult dental coverage.

Early and Periodic Screening, Diagnostic, and Treatment (EPSDT)

EPSDT benefit is Medicaid’s comprehensive child health program. The goal of the program is to concentrate on prevention and early diagnosis and treatment of medical conditions. The state will determine the schedule for direct dental referrals, which are required for every child. At a minimum, services must include restoration of teeth, maintenance of oral health, and relief of pain and infections.

Medicare

Medicare will only pay for dental services that are an integral part of either a covered procedure (e.g., reconstruction of the jaw following accidental injury) or for extractions done in preparation for radiation treatment for neoplastic diseases involving the jaw.

Coverage is not determined by the value or the necessity of the dental care but by the type of service provided and the anatomical structure on which the procedure is performed.

Medicare Advantage Plans

Medicare Advantage plans are health plans that are part of the Medicare program. Generally, all Medicare covered health care can be obtained through this type of plan, which can include prescription drug coverage. Many of these plans offer enhanced benefits and possibly even lower copayments than in the original Medicare plan.

In order to join a Medicare Advantage plan, a patient must have Medicare Part A and Part B. The patient will need to pay a monthly Medicare Part B premium to Medicare and, in addition, pay a monthly premium to the Medicare Advantage plan for the extra benefits provided.


To learn more, download the entire publication: Dental Benefits: An Introduction. Created by the ADA’s Council on Dental Benefit Programs, it includes information about the management of dental plans, communicating with third-party payers, handling coordination of benefits and more.
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