Direct Reimbursement Plan Author:    Posted under: Health InsuranceHealth Insurance Types

With the cost of living soaring high while the economy is barely making it, people are always looking for economical ways to protect themselves from unforeseen events or emergencies. It is no surprise that the first thing that makes the cut is insurance- whether car, medical or dental.

This is the reason why insurance providers come up with coverage plans or policies that help individuals keep their coverage for a minimum amount of money. The employed population is fortunate to have backing from their employers. Maintaining health and dental insurance is not a problem for them. Those who have individual insurance coverage needs to keep up with premium payments in order for them to be protected.

The concept of Direct Reimbursement Plan may have been the result or answer to this problem.  Direct Reimbursement Plan is a dental insurance that is self-funded yet a cost effective benefit plan.

As the term reimbursement implies, the patient or employee pays the dentist for whatever procedure was done upfront. The patient or employee has the freedom to choose his or her dentist regardless if the dentist is network accredited. After the procedure is done, the insured will then get a receipt from the dentist with a breakdown of the treatment done and incurred expenses. The employee then submits the receipt to the employer and the employee is reimbursed a percentage of the amount incurred as stated by the policy. It normally takes about a week to process reimbursement.

In the case of individual direct reimbursement coverage, the patient will submit a receipt and proof of treatment directly to the insurer for reimbursement.  Depending on the insurer, the lead-time to process such a claim is about a week or two or sometimes even longer.

The advantage of having Direct Reimbursement Plan for employees is eliminating or having lower administrative charges compared to the usual dental insurance. By eliminating administrative charges altogether, more money is allotted for the actual dental treatment. There would be less paperwork as well and no fixed monthly premiums will be collected or required to keep this kind of plan.

Another advantage of the Direct Reimbursement Plan is that there are no exclusions in treatments to be done thus making it convenient for the patient. This plan also has a wider coverage than the normal dental insurance plan since it covers cosmetic surgery as well.

Of course, if there are advantages, there are disadvantages as well. But in the case of Direct Reimbursement Plan, the major disadvantage would be non-payment of reimbursement by the insurer and therefore your employer will not be able to reimburse your expenses too. This means that you will be out the money you have already paid for the services rendered. But with indemnity plan insurance providers usually pay claims directly, there’s a lower risk on non-payment at all.

As always, be knowledgeable in whatever plan you are getting. Make sure to get your money’s worth.


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