Direct reimbursement (DR) is a self-funded option for dental benefits that can benefit employers, patients, and dentists. DR is versatile in its structure, cost effective, and simple to operate. DR plans allow patients to see the dentist of their choice.

DR plans reimburse patients according to dollars spent on dental care, not the type of treatment received. The appropriate treatment is determined by the patient and their dentist, not an outside carrier or insurance company. Usually the plan covers most types of treatment, including pre-existing conditions, at a predetermined level of reimbursement.

The employee goes to the dentist, has dental procedures completed, normally pays the dentist, submits the receipt to the employer or TPA, and is reimbursed at the appropriate predetermined rate. The employer determines reimbursement levels and annual maxims and can structure the plan to fit the employees' needs and the amount of funds available for dental benefits.

Administrative costs are minimized because the plan may be self-administered or managed by a third party administer (TPA). Any money left in the fund at the end of the year belongs to the employer, who can roll them over into the following year or use it to increase the following year's benefits.

Dental direct reimbursement works well for groups of any size. For groups of 100+, employee cost projections may be used with a high degree of confidence and with little need to fund reserves. Groups with fewer than 25 to 99 employees can use cost projections as estimates based on average utilization. In some years such groups will produce costs more or less than projected, so it is recommended that a reserve be built through over-funding the first year program.

For groups with fewer than 25 employees, a no risk funding approach is recommended. Under this method, each person's annual maximum is determined by dividing the total amount of benefit that the employer wants to allocate by the number of persons covered. This is certainly a more efficient use of funds than giving raises, as neither the employer or the employee will pay taxes on this amount, and in fact, the money reimbursed to the employee is normally deductible as an employer's business expense.