Beginners Guide To Dental Insurance

Are you new to dental insurance? Is you company thinking of adding dental benefit for the first time? At EBsurance, we’re convinced that dental care doesn’t have to be complicated or confusing, and we’re here to make things clear and easy to understand — transparency for the information generation!

So let’s get started!

Deductible

Dental plans typically include a deductible, most likely in the range of $25 to $50. A deductible is the amount that a member is required to pay before insurance benefits kick in. For example, if an individual deductible is $50, that member is required to pay for the first $50 of dental care before taking advantage of insurance. Deductibles for family plans are often limited to a family deductible. This means that if a family plan included a family deductible of $150, coverage would begin once the $150 deductible was met, even if the individual deductibles had not yet been met. In most plans, but not all, deductibles are waived for Diagnostic & Preventive services (see below). Why? Well, insurance companies want members to go to the dentist and get checked out to prevent major issues. Makes sense, right?

Plan Maximum

Additionally, plans will include a maximum payment, usually just called a maximum. The maximum is the highest dollar amount that a dental plan will cover in a given amount of time for an individual member. For Example, with an annual maximum of $1500, the dental plan will cover up to $1500 of dental services per person each year. If the plan includes orthodontics coverage (read: braces), there will typically be two maximums: one for ortho and one for everything else. Ortho usually comes with a lifetime maximum, while the regular maximum is typically annual.

Service classes

The next important concept you’ll want to understand is dental insurance service classes and how they differ from one another. The term “service classes” refers to the four broad categories of dental care, which are usually covered at different levels by insurance. These categories are:

  • Diagnostic & preventative
  • Basic services
  • Major services
  • Orthodontics

 

Here’s a simple chart to give an overview of the classes: 

Preventive

Basic

Major

Ortho

Typical  services Included

  • Cleaning
  • Exams
  • Basic x-rays
  • Fluoride
  • Sealants
  • Filings
  • Extractions
  • Root Canals
  • Periodontal Services
  • Implants
  • Dentures
  • Advanced oral surgery
  • Crowns
  • Braces

 

Typical coverage level

Plans may differer depanding of carrier and individual plan design

Diagnostic & Preventative: For many people, the majority of visits to the dentist will fall under the category of diagnostic and preventative. Diagnostic and preventative covers many of the services a person receives during a routine visit to the dentist. Exams and cleanings are almost always included, and basic X-rays usually fall into this category as well. In many plans, sealants and fluoride treatment for children under age 14 are also considered diagnostic and preventative. If most of your visits to the dentist involve some combination of these services, you’re in luck. Diagnostic and preventative is typically covered at 100% and often does not require the deductible to be met (but read the fine print!).

Basic Services: If you’ve ever seen a dentist for anything other than a routine cleaning and checkup, chances are you’ve received some form of basic service. Examples include fillings, basic gum disease treatment, and extractions; root canals are sometimes included under basic services. If you anticipate needing coverage for basic services, we have good news! Basic services are usually covered at 80% or even 90% with Beam, meaning a member could pay as little as 10% of the cost.

Major services: This service level covers more complicated procedures, such as complex oral surgeries, dentures, implants, and crowns. Coverage for major services is typically more limited, but if major services are a priority, you can find a dental plan with coverage at up to 60%.

Orthodontics: If you had braces as a teenager or are the parent of a teen with braces, this category is probably (too) familiar to you. Ortho refers to braces and associated treatments and, when it is included, is typically covered at 50%. The caveat here is that ortho often includes an age limit of 19, meaning that people older than that are not eligible for orthodontic coverage.

Network

A network is an organization made up of a group of medical providers — in this case, dentists. A dental benefits carrier uses a network to give clients easy access to a large number of dentists that will accept their insurance. In turn, dentists in the network gain access to a wider range of potential patients. Additionally, the network determines the fee schedule that the dentist can accept from an insurance company, which frees both the dentist and the insurance company from the administrative work of determining fee schedules for individual procedures.

Out-of-Network Coverage

What happens if you visit a dentist that’s out-of-network on your insurance plan?

 If you receive care from a dentist who’s considered out-of-network, there’s a chance that your insurance will cover a lower percentage of the cost than it would for an in-network dentist. Out-of-pocket costs will depend on whether the plan has a MAC (Maximum Allowable Cost) or UCR (Usual Customary Reasonable) reimbursement.

MAC

Stands for: Maximum Allowable Charge

The maximum amount dental carrier pays for a covered service from a provider, whether they’re in-network or out-of-network. What’s the difference, then? It comes down to your out-of-pocket cost. For instance, an in-network dentist may charge more for a procedure than your plan’s MAC fee. Because they’re in-network, though, they’ve agreed to accept the MAC fee. The difference between the provider’s charge and the MAC fee would be written off — you would not owe this difference. Dental carrier would then cover a percentage of the MAC fee, and you would owe any outstanding balance (coinsurance), assuming your deductible has been met. An out-of-network dentist, however, isn’t contractually obligated to accept the MAC fee. That means you’re responsible for coinsurance and any difference between the provider’s charge and the MAC fee.

Example*: This is getting a little complicated, so let’s use an example. Say you need a tooth extraction, and your particular dental plan covers 80% of the cost for the procedure. The MAC fee for a tooth extraction is $100 in your area, and your dentist — who is in-network — charges $125. Dental carrier would cover 80% of the MAC fee, which comes out to $80. You would owe $20, and the provider would write off the remaining $25 because they’ve agreed to accept the MAC fees as part of the dental network.

Now, let’s pretend your provider is out-of-network. In this scenario, the provider still charges $125 for the extraction and dental carrier would still cover 80% of the MAC fee ($80). Because the provider is out-of-network, they aren’t obligated to accept the MAC fee, which means they’re still owed $125 in total. Assuming your deductible has already been met, you would pay the remaining $45 owed.

UCR

Stands for: Usual, Customary, and Reasonable

The fee for a specific procedure based on what providers in your geographic area charge for it on average. The UCR value is indicated as a percentile and is calculated by a third party based on claims for that procedure in your area (defined by the first three digits in your provider’s zip code). Let’s use a standard dental carrier plan to elaborate on this. The 90th UCR is typical for many of our plans. This means the UCR value for a given procedure will be set so that 90% of providers in your area charge that amount or less. This amount is the maximum dental carrier will pay for a covered service from an out-of-network provider.

Example: UCR gets a bit complicated, so let’s go back to the tooth extraction example. To keep things simple, we’ll say your plan still covers the procedure at 80%. Instead of MAC, your plan uses the 90th UCR, meaning 90% of the dentists in your zip code would charge that amount or less for the procedure. We’ll say that charge is $110 in this case. Dental carrier would cover 80% of that $110, which amounts to $88. If your dentist charged $125, you would pay the remaining $37 if your deductible has already been met.

Now, let’s say the dentist charges $100 for a tooth extraction, which is less than the $110 UCR fee. Since the office fee is less than the UCR fee, we would cover a portion of the office fee. We’d cover 80% of that $100 cost ($80), and you’d owe the remaining $20.

Waiting Period

Many dental plans include waiting periods of some kind, but they can vary in terms of length and services they affect. Basically, a waiting period is a given length of time that a member needs to be enrolled before they can take advantage of a certain part of their dental plan.

For example, let’s say you enroll in a dental plan that has no waiting periods on diagnostic and preventative, a three-month waiting period on basic services, and a six-month waiting period on major services. Let’s say your effective date is January 1st. You could go to the dentist for diagnostic and preventative care and take advantage of the plan’s coverage on New Year’s Day . However, if you need care for basic services, you won’t be able to take advantage of the plan until April 1st, three months after the effective date. For any major services, this would increase to six months, or July 1st.

Age Limits

The bad news is that some services are only available to people under a certain age. The good news is that the majority of services don’t have age limits at all. Actually, there are only a few places where age limits typically apply.

The first is orthodontics. Orthodontics usually have an age limit of 19 — this means if you’re over 19 and need orthodontic services, you can still receive treatment, but the costs won’t be covered by your insurance plan.

The only other services that commonly have an age limit are fluoride treatment and sealants, which are typically covered until age 14.