Brokers/Consultants/TPAs
What are your clients really looking for in a dental plan?
- Cost-effectiveness
- Comprehensive care
- Alternatives
- Simplicity
- Freedom to visit any dentist
(including their current dentist)
Direct Reimbursement (DR) is a self-funded program in which the individual is reimbursed based on a percentage of dollars spent for dental care provided, and which allows employees to seek treatment from the dentist of their choice. DR is an innovative dental benefits plan that offers the above benefits and more—and brokers across the country are finding DR to be a valuable asset to their portfolios.
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DR is for groups
not individuals.
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How can DR generate income for brokers?
- By charging a one-time fee to an employer for setting up a self-administered DR plan.
- By receiving fees from a third-party administrator (TPA) for referring clients for TPA services.
- By using DR as a "door opener" with new clients and prospects.
More than 4,000 U.S. companies, large and small, currently utilize DR plans, and thousands more are responding to the ADA's print advertising and direct-mail campaign. The ADA would like to educate brokers and consultants like you, so that when clients approach you with questions about DR, you'll have all the answers they need. Additionally, brokers who work in conjunction with constituent dental societies receive DR leads and materials at no charge. You'll be able to tell them how DR can save them time and money. And you'll know exactly how DR can generate income for you.
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Broker Incentives
Direct Reimbursement is a self-funded dental plan, and some companies may even opt to self-administer. So how can a broker generate income from such a plan?
By selling DR plans, brokers can add revenue to their business in the following ways:
Incentive 1: Fees from a third-party administrator
When a company chooses to outsource the administration of its DR plan, part of the monthly administration fee can be paid to the broker-thus generating regular cash flow. Many companies that implement a DR plan will stay with DR, so that over the long term, DR can prove to be a reliable source of income for you year after year.
Incentive 2: One-time fee for setting up self-administered DR plans
When an employer chooses to self-administer a DR plan, the client pays a fee to the broker who has designed and implemented the plan for the company. The broker determines this fee based on market conditions. In addition, an on-going annual consulting fee can be charged to clients who wish to have their plan assessed and potentially re-designed based on utilization and growth of the company.
Incentive 3: DR is a "door opener" with clients/prospects
DR is an innovative product about which many employers have never heard. Making DR available, then, quickly separates you from your competition. By implementing a client's DR plan, you've garnered credibility and won the client's trust; a satisfied client may mean an opportunity for you to bid on other lines of the company's benefits business.
Receive Leads and materials—at no charge!
Annually, the ADA generates thousands of leads from its print advertising and direct-mail campaign. The ADA and numerous state dental societies also regularly receive information from dentists about patients who are looking to change their dental plan and have requested information about DR. Historically, the ADA and dental society staff have followed up on these leads. Today, however, many state dental societies are passing these leads on to brokers like you, to ensure that their questions are answered and that their needs are met.
The ADA produces many DR materials, including brochures and case studies, to help employers understand the benefits of DR. These materials are available at no charge upon signing a simple licensing agreement with the ADA. The ADA also maintains a list of TPAs who handle DR. Please contact the Dental Benefit Information Service (DBIS) to request this type of information.
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Your clients will thank you!
DR allows your clients to reduce administrative hassles and red tape related to their dental benefit. It can virtually eliminate employees' complaints about exclusions and limitations on treatment. In addition, DR can offer clients the following significant advantages:
- Fewer hassles. Employers and/or TPAs appreciate the easy administration of the DR because of its simplicity.
- Fewer surprises. Since DR reimburses patients based on dollars spent on dental care—not on the type of treatment received—employers (and employees) can easily calculate, in advance, what their share of the dental expense will be.
- No monthly premiums. Instead, employers pay when actual treatment is received. For that group of employees who never visit the dentist, employers pay virtually nothing.
A DR plan design, with its total annual maximum per covered employee, allows your clients to control their costs according to their budgets. At the same time, it offers flexibility that will make their employees smile:
- DR frees patients to plan needed treatment with the dentists of their choice.
- For procedures that DR covers—from cleanings to orthodontics to prosthodontics—all are treated equally. This aspect distinguishes DR from other types of plans.
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Self-funding Can Be a Sensible Option
Some employers may express initial hesitation about self-funding a dental benefits plan. For this audience, it helps to emphasize the basic differences between medical needs and dental needs. Unlike medical costs, which can be unpredictable and high in cost—and therefore very appropriate for insuring—dental costs are predictable and non-catastrophic. Why insure a plan that is low risk and low cost? Remind employers of the following important facts about dental care:
- Dental disease is preventable.
- The public's need for dental care is highly predictable.
- Dental care involves relatively low costs and is easily manageable.
- People do not over-utilize dental benefits.
These simple differences between dental care and medical care will help to reassure plan purchasers that self-funding their dental benefits may be the most sensible option.
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Monitoring Claims
Other clients may ask: Without usual, customary and reasonable (UCR) fees and the participation of a third-party insurer, who's monitoring the claims and ensuring that dentists don't overcharge for services? What about the discounts that many managed care company's offer?
- Assure your clients that DR claims expenses may be tracked and monitored easily-and by the people who care the most: the employer and the employee. Employers (or their third-party administrators) review employees' claims as part of the on-going reimbursement process.
- Moreover, the employees' direct participation in paying for dental treatment results in more knowledgeable consumers, who read their dental statements. Competition naturally tends to keep dentist's fees in line with their professional peers.
- Many dentists routinely offer discounts for patients who pay for treatment up-front. No matter what dental plan a company offers, the employer should always encourage their employees to seek dental care providers who work well with the company's plan, offering high-quality care at the most appropriate price.
UCR fees, exclusions and limitations on treatment, and dentist networks have become part of many dental benefit plans as a way to control costs; however, they also may generate costs of their own, especially in the areas of administration. In addition, they may also affect employee satisfaction. DR is an innovation that allows a company to limit costs completely within its budget while giving employees the right to choose their own dentist.
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