What Is Dental Indemnity and How Does It Work?
Demystify dental indemnity insurance. Understand how this unique plan operates, offering flexibility and direct reimbursement for care.
Dental indemnity insurance offers a flexible approach to managing dental care costs. It operates differently from other common dental plans, providing policyholders with specific benefits and responsibilities.
Understanding Dental Indemnity
Dental indemnity insurance is a fee-for-service dental plan that allows policyholders to choose any licensed dentist without network restrictions. Unlike managed care plans (HMOs or PPOs), an indemnity plan does not limit choices to a specific network of dentists.
Under an indemnity plan, the insurer reimburses the enrollee for a percentage of covered dental expenses after services are rendered. This provides flexibility and the freedom to continue seeing a preferred dentist or choose a new one based on personal preference or location.
How Dental Indemnity Plans Function
Dental indemnity plans operate on a reimbursement basis. The policyholder typically pays the dentist directly for services, then submits a claim to the insurer for reimbursement. The amount is determined by the insurer’s “Usual, Customary, and Reasonable” (UCR) fees for the specific dental procedures received.
UCR fees represent the maximum amount the insurance company will reimburse for a given service. If a dentist’s charge exceeds the UCR rate, the policyholder is responsible for paying the difference out-of-pocket. These plans often feature a percentage-based reimbursement structure: 100% for preventive services, 80% for basic care, and 50% for major procedures after a deductible is met. Additionally, most indemnity plans include an annual maximum benefit, which is the total amount the insurer will pay for covered services within a calendar year, typically ranging from $1,000 to $2,000.
Typical Coverage and Exclusions
Dental indemnity plans generally cover a range of services. Preventive services, such as annual exams, routine cleanings, and X-rays, often receive the highest percentage of coverage, sometimes up to 100%. Basic dental care, which includes procedures like fillings and simple extractions, is commonly covered at a lower percentage, often around 80%.
Major dental services, such as crowns, bridges, dentures, and root canals, typically have a lower reimbursement rate, often around 50%. Common exclusions include cosmetic procedures, such as teeth whitening or veneers. Orthodontics for adults may also be excluded unless specifically outlined in the policy. Furthermore, services not deemed medically necessary, experimental treatments, or those that began before the policy’s effective date are usually not covered.
The Reimbursement Process
The reimbursement process for dental indemnity plans involves several distinct steps initiated by the policyholder after receiving dental care. First, the patient must obtain an itemized bill or statement from their dentist that clearly details the services provided, the dates of service, and the charges incurred. This document serves as proof of treatment and payment.
Next, the policyholder needs to complete a claim form provided by their insurance company. These forms are typically available on the insurer’s website or can be requested directly. The completed claim form, along with the itemized bill, is then submitted to the insurance company, usually through an online portal or by mail. Upon receipt, the insurer processes the claim by verifying eligibility and determining the UCR fees for the services. After processing, which can take several weeks, the insurance company sends an Explanation of Benefits (EOB) detailing the approved amount and the reimbursement payment directly to the policyholder.