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Glossary – Understanding your Dental Benefits

how to understand dental insurance

For your quick reference, the terms relating to dental benefit plans that are used in this booklet are defined below.

Contract Dentist – A dentist who agrees to provide specified services at specific levels of reimbursement under the terms and conditions stipulated by the contract.

Contract Term – The period of time, usually 12 months, for which a contract is written.

Deductible – The amount of a dental expense for which the beneficiary is responsible before a third party will assume any liability for payment of benefits. The deductible may be an annual or one-time charge, and may vary in amount from program to program.

Eligibility Date – The date an individual and/or dependents become eligible for benefits under a dental benefits contract. This date is often referred to as the "effective date."

Exclusions – Dental services not covered under a dental benefit program.

Fee-for-Service – A method of reimbursement by which the dentist establishes and expects to receive his or her full fee for the specific service(s) performed.

Fee Schedule – A list of the charges for specific dental procedures established or agreed to by a dentist.

Flexible Spending Account (FSA) – An employee reimbursement account primarily funded with employee-designated salary reductions. Funds may be reimbursed to the employee for health care (medical and/or dental) and dependent care and are considered a nontaxable benefit.

Freedom of Choice – The concept that a patient has the right to choose any licensed dentist to deliver his or her oral health care without any type of coercion.

Managed Care – A type of dental plan that is a contractual arrangement in which payment or reimbursement and/or utilization is controlled by a third party. This concept represents a cost containment system that directs the utilization of health care by: a) restricting the type, level and frequency of treatment; b) limiting the access to care; c) controlling the level of reimbursement for services; and d) controlling referrals to other dentists.

Pre-authorization – A statement by a third-party payer indicating that proposed treatment is covered under the terms of the benefit contract. Some plans require a dentist to submit a treatment plan to a third-party payer for approval before treatment is begun.

Pre-certification – Confirmation by a third-party payer of a patient's eligibility for coverage under a dental

benefit program.

Pre-determination – A process used to determine the benefits available for dental services that are planned by the dentist: an estimate of the amounts payable by the plan if services are rendered when the patient is eligible. Under some programs, predetermination by the third party is required when covered charges are expected to exceed a certain amount.

Premium – The regular (typically monthly) fee charged by third-party insurers and used to fund the dental plan.

Reimbursement – The payment made by a third party to a beneficiary, or to a dentist on behalf of the beneficiary, toward repayment of expenses incurred for dental services covered by the contractual arrangement.

Self-funded plan – A benefit plan in which a plan sponsor (usually the employer) finances the entire employee benefits, in place of purchasing such coverage from a commercial carrier.

Third-Party Administrator (TPA) – An individual or company that processes and pays claims for self-funded dental plans. The TPA undertakes no financial risk for claims incurred. Some commercial insurance carriers and plans also have TPA operations to accommodate self-funded employers seeking administrative services only (ASO).

Third-Party Payer – An organization—usually an insurance company—other than the patient or health care provider (i.e. dentist) responsible for paying the provider designated expenses incurred on behalf of the insured (i.e. the patient).

Utilization – The extent to which the members of a covered group use a program over a stated period of time; specifically measured as a percentage determined by dividing the number of covered individuals who submitted one or more claims by the total number of covered individuals.

The information given is not intended to provide either legal or professional advice. Dentists and others should consult directly with a qualified attorney or professional for appropriate legal or professional advice. To the extent that this presentation includes links to any non-ADA Websites, the ADA intends no endorsement of their content and implies no affiliation with the organizations that provide their content. Nor does the ADA make any representations or warranties about the information provided on those sites, which ADA does not control in any way.

Any tax information or written tax advice contained herein is not intended to be and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer.

Category: Insurance

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