Below are answers to some common questions about DR/DA Plans:
Q: If I design a plan for 95 individuals with an annual maximum of $1,000, will I spend the full $95,000?
A: It’s highly unlikely. Experience tells us that plans do not reach their maximums for several reasons:
- Almost 35% to 40% of people with dental benefits do not receive dental treatment in a given year.
- Of those who do receive treatment, most incur dental costs around $200 to $225 a year.
- Stop-loss insurance is often available to cover the risk of excessive claims if the company wants an absolute plan maximum limit.
Available for download are three actual Tennessee based firms’ claims experience:
As you can see by these samples, the budgeted and the actual claims are very close each year.
Q: Is DR/DA easy to administer?
A: Yes! Direct Reimbursement Dental is an experienced administrator that provides the following services:
- Plan Cost Estimates
- Plan Implementation Assistance
- Employee Communication Piece and ID Card
- Preparation of Draft Booklets (Summary Plan Description)
- Claim Adjudication and Tracking
- Coordination of Benefits
- Sophisticated Record Retention
- Bulk or Individual Distribution of Employee Explanations of Benefits
- Choice of Reporting Frequency
- Annual Summary Report
- Individual Plan Design Consultation
- Enrollment Assistance
- Preparation of Draft Plan Document
- Provide Administrative Forms (Enrollments, Claim, EOB, etc.)
- Professional Claims Review
- Toll Free Customer Service Number
- Production of Benefit Checks
- Bulk or Individual Distribution of Provider Checks, if assigned
- Management Reports
- Commitment to Service Excellence
Q: Does DR/DA Work for Companies of Any Size?
A: Yes. Whether your company is big or small. DR/DA can be customized to suit your needs and financial constraints. In fact, there’s almost no practical limit on the size of a company that can benefit from DR/DA.
Q: How Do Flexible Spending Accounts (FSAs) Work With Direct Reimbursement/Direct Assignment?
A: FSAs work the same way with DR/DA as they do with any other dental benefit plan. The usual tax benefits of FSAs would be available (along with the benefits of DR/DA):
- Employee contributions are pre-tax – No Social Security Tax or Income Tax is withheld from the employee’s contribution.
- When employees are reimbursed according to the plan design, their out-of-pocket dental expenses can be paid from the Flexible Spending Account. That means they are paying the expenses not paid by the plan with pre-tax dollars.
- Since the funds in a Flexible Spending Account do not qualify as income, employers are not responsible for paying wage-sensitive taxes (i.e. FICA and FUTA) on the amounts set aside.
- Direct Reimbursement Dental offers a turnkey cafeteria plan for all size employer groups. If your group would like a proposal, please indicate on the cost estimate form.