Just how long does an insurance company have to respond to a dental claim? I called the carrier to follow up on an unpaid claim and was told that the plan is self-funded, and they can't pay the claim until the employer funds the plan. What should I do?

Most states have prompt payment laws, which define how long insurance companies have to pay medical and dental claims. Some states require clean claims to be paid within 15 days. Other states allow 60 days. Some states differentiate between electronic claims and paper claims (e.g., claims must be paid within 30 days if submitted electronically or 45 days if submitted on paper). The key to remember is that each state’s prompt payment laws only apply to fully insured insurance plans licensed in that particular state.

A fully insured dental plan is one in which the employer (or employee) pays a premium for a defined amount of coverage, and the carrier accepts the financial risk of paying the claims. For example, a carrier may offer $1,000 worth of benefits even though it only collects $500-600 in premiums for the year. The carrier is taking a statistical gamble that the majority of its insured members will not utilize more than is collected in premiums.

You have already been told that you are dealing with a self-funded plan, rather than a fully insured plan. Self-funded dental plans are not regulated by state prompt payment laws. Self-funded dental plans are regulated by the U.S. Department of Labor, under the Employee Retirement Income Security Act of 1974 (ERISA), and ERISA only requires a dental plan to acknowledge that the claim was received within 45 days and to pay the claim within a “reasonable” period of time.

In your situation, you should contact the patient and explain that the dental plan has refused to pay the claim because the employer has not funded its dental plan. Suggest that the patient notify his/her Employee Benefits Manager of the problem. In the meantime, request a credit card number from your patient to clear his/her account, unless prohibited by a PPO contract.

Going forward, consider asking patients to sign a credit card authorization form as a condition of accepting assignment on dental claims. This would authorize you to charge the patient’s credit card if a dental plan does not pay in a timely manner or if a patient does not pay the remainder of his/her account in a timely manner.

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