Direct Reimbursement Information

The Dental Benefits Plan for Smart Companies

Direct Reimbursement is an innovative approach to self-funding employee dental benefits. It is strongly supported by the California Dental Association and the American Dental Association as a cost-effective way to provide a dental plan that gives employees the freedom to choose their dentists.

What is a Direct Reimbursement Dental Plan?

Direct Reimbursement (DR) is a self-funded dental benefits plan that reimburses an employee for dental-care expenses. A self-funded dental benefit plan is not the same as a self-insured dental plan using an insurance product.

DR is ideally suited for dental expenses because dental care costs are predictable and noncatastrophic. There is no need for risk charges and expensive claim management procedures that are built into dental insurance products.

Each employer determines the reimbursement formula for expenses incurred. The employee is reimbursed from a fund established by the employer using employer and employee contributions. DR eliminates most administrative fees so more dollars go to treatment.

For more answers to frequently asked questions, view Direct Reimbursement FAQ. 

DR is Simple

1. The patient selects any dentist and receives treatment.
2. The patient pays the dentist using a method acceptable to both parties.
3. The employee submits a receipt for services to his or her claims administrator and typically receives a reimbursement check and explanation of benefits within one week.

DR is Easy to Establish

Direct Reimbursement lets you decide what you and your employees will contribute and reimburses employees directly for their dental expenses. With most dental insurance you pay hefty premiums for benefits your employees may not use. But with Direct Reimbursement, you pay only when your employees actually receive dental care.

Several examples of DR benefit designs are available, which illustrates DR plan-design flexibility.

A DR plan:

  • is simple enough that the plan can be administered in-house
  • has no deductibles;
  • has no complicated schedules based on procedures; and
  • has no exclusions.

DR is easy to communicate, easy to understand and to use — a real plus for a company sponsored plan! For more information about software that can help you manage a direct reimbursement plan, view Direct Reimbursement Links.

DR is Cost Efficient

Employers using DR agree that these plans are more cost efficient than any other dental plan. DR has low administration costs so more dollars go to treatment.

Self-funding makes sense for dental care because:

  • patients don’t overuse it;
  • the average dental claim check is less than $100;
  • the dental plan design limits the reimbursement amount; and
  • financial exposure can be determined and limited.

DR is Attractive to Employers and Employees

For the Employer
DR is not a traditional dental insurance program. The company does not pay insurance premiums; neither does the employee. The company spends its benefits dollars to reimburse those who have used dental services rather than to pay or copay costly premiums for all employees. Each company can tailor the scope of benefits offered. DR plans work without restrictions such as deductibles, waiting periods or variations in reimbursements based on arbitrary classes of treatment. DR builds corporate loyalty by reinforcing the employer's participation. Employees receive reimbursement checks from their employers rather than from an insurance company.

For the Employee
The employee can go to the dentist of his or her choice.Employees become efficient shoppers for dental care since they pay the bills and are then reimbursed. Typically employees are reimbursed at the established benefit level within a week after submitting proof of payment. This eliminates long waits for reimbursement and excessive paperwork.

For More Information
Direct Reimbursement dental plans offer savings, simplicity and satisfaction to employers and employees. If you or someone you know wants details about Direct Reimbursement, contact us at:

Direct Reimbursement
California Dental Association
P.O. Box 13749
Sacramento, California 95853-9981
800.736.7071, extension 5322

e-mail: patti.cheesebrough@cda.org