14.2 Dental, Vision, and Limited Benefit Plans

Dental Insurance

Dental coverage is usually structured around four service categories, each treated differently for cost-sharing. The exam tests the ordering and the typical coinsurance tiers.

Dental plans nearly always carry an annual benefit maximum (e.g., $1,500-$2,000 per person) rather than the open-ended maximums seen in medical plans, and orthodontia is subject to a separate lifetime maximum. A scheduled (indemnity) plan pays a fixed dollar amount per procedure from a fee schedule; a comprehensive (nonscheduled) plan pays a percentage of usual, customary, and reasonable (UCR) charges.

Worked example. A member needs a $1,200 crown. The plan covers major services at 50% after a $50 deductible, with a $1,500 annual maximum already $400 used. Plan pays 50% x (1,200 - 50) = $575, but only $1,100 of the annual maximum remains, so the $575 is paid in full and the member owes 1,200 - 575 = $625.

Key traps: preventive care is the carrot that drives early use, waiting periods (often 6-12 months) commonly apply to major services, and missing-tooth and pre-existing condition clauses can exclude pre-coverage conditions.

Vision Insurance

Vision plans are limited benefit plans covering routine eye care that medical insurance excludes. A typical schedule allows a covered exam, lenses, and frames on a fixed frequency.

• Eye exam — once every 12 months
• Lenses — once every 12 months
• Frames — once every 24 months
• Contact lenses — in lieu of glasses, on a frequency schedule

Vision plans pay a frame allowance (a flat dollar amount); the member pays any excess. Medical eye disease (cataracts, glaucoma, injury) is covered under the major medical plan, not the vision plan — a frequent exam distractor.

Limited Benefit and Specified-Service Plans

"Limited benefit" plans cover a narrow risk or pay a fixed sum rather than comprehensive expenses. They are not substitutes for major medical and, under the ACA, are excepted benefits. Examples include dental, vision, hospital indemnity, specified-disease, and short-term/limited-duration medical. Because they cover a limited risk, premiums are low and underwriting is light, but consumers must be told in writing that the policy is not comprehensive coverage.

A blanket health policy (covering members of a group such as students, athletes, or airline passengers) and credit health insurance (paying loan installments during disability) are other limited forms. Credit coverage amounts may not exceed the outstanding loan balance.

Dental Plan Delivery Models and Coordination

Dental coverage is delivered through several structures the exam expects you to distinguish:

• Dental indemnity (fee-for-service) — the insured sees any dentist; the plan pays a percentage of UCR or a scheduled amount, and the member is balance-billed for the difference.
• Dental PPO — a network of dentists who accept negotiated fees; in-network care costs the member less, out-of-network care more.
• Dental HMO (DHMO) — the member selects a primary dental office and pays fixed copays; out-of-network care is generally not covered.
• Discount dental plan — not insurance at all; a membership that gives access to reduced fees, which must be marketed as a discount card, never as coverage.

When a person is covered by two dental or health plans, coordination of benefits (COB) prevents the insured from collecting more than 100% of the actual charge. The plan covering the patient as an employee/subscriber is primary; the plan covering them as a dependent is secondary. For a dependent child covered by both parents, the birthday rule applies: the plan of the parent whose birthday (month and day) falls earlier in the calendar year is primary — not the older parent. The secondary plan pays only the unpaid balance up to its own allowance.

Worked COB example. A child's dental cleaning costs $120. The father's plan (birthday March 4) is primary and pays $96 (80%). The mother's plan (birthday September 12) is secondary; it would have paid $90 but, under COB, pays only the remaining $24, so total payment equals the $120 charge — no profit to the insured.

Group dental plans typically carry lower per-person maximums but waive or shorten waiting periods compared with individually purchased dental, and they spread adverse-selection risk across the employee pool.

Dental Plan Structures and Scheduled vs. Comprehensive

Dental coverage is tested for how it categorizes and pays services:

• Preventive/diagnostic (cleanings, x-rays) — usually covered at 100%, often without a deductible, to encourage routine care.
• Basic (fillings, extractions) — typically 80% coinsurance.
• Major (crowns, bridges, dentures) — typically 50% coinsurance, sometimes after a waiting period.
• Orthodontia — often a separate lifetime maximum, common in dependent-child coverage.

Plans pay on a scheduled basis (fixed dollar per procedure), a comprehensive (UCR) basis, or a combination. Annual benefit maximums (e.g., $1,500-$2,000) cap insurer payments — the opposite of medical out-of-pocket maximums, which cap the insured's cost. Dental and vision are frequently sold as limited-benefit lines excluded from major medical.