Dental, vision, and specified-disease policies

Limited-benefit health policies

Major medical insurance is built to pay for large, unpredictable medical bills. Three common policies are built differently: dental, vision and specified-disease coverage. Each covers one narrow slice of health care, usually under its own policy, and each is meant to sit alongside a major medical plan, not replace it.

Florida law treats them as a separate category. Its definition of a health benefit plan for small-employer coverage expressly leaves out specified disease, individual hospital indemnity, dental-only and vision-only insurance, along with other supplemental plans designed to fill gaps in an underlying health plan (Fla. Stat. § 627.6699). Florida's blanket-policy statute likewise lists "limited-scope dental or vision benefits" and "coverage only for a specified disease or illness" as their own kinds of benefit (§ 627.659(6)(b)-(c)).

A diagram titled Three limited-benefit health policies. Three columns stand side by side on top of a wide bar labelled major medical plan, the comprehensive coverage these policies sit on top of and never replace. The first column, dental, shows three stacked boxes: class one preventive, typically paid at one hundred percent; class two basic, typically eighty percent; and class three major, typically fifty percent. Below them it notes that an annual maximum caps what the insurer pays, that dental plans use waiting periods and frequency limits, and that plans are indemnity, P P O or dental H M O. The second column, vision, shows a routine eye exam with a copay, for example every twelve months; lenses and frames paid by a dollar allowance; and contact lenses paid by an allowance instead of glasses. It notes that network providers are paid more than the out-of-network schedule and that eye disease goes to the medical plan. The third column, specified disease, shows that it covers a named disease only, most often cancer; pays a fixed benefit as a lump sum or per day or per treatment; and pays the insured regardless of other coverage. It notes that a disease diagnosed during the waiting period is not covered, and that the policy is a supplement, not a substitute. A footnote says the percentages are typical plan designs, not legal requirements. — Dental, vision and specified-disease coverage compared, each supplementing major medical.

Dental insurance

Dental plans come in three basic designs:

Indemnity (fee-for-service) — the insured may see any dentist; the plan reimburses a

percentage of the usual, customary and reasonable fee, or a scheduled amount.

Dental PPO — a network of dentists who accept discounted fees; out-of-network care is

covered at a lower level.

Dental HMO (prepaid or capitation plan) — the insured chooses a dentist from the plan's

panel, who is paid a fixed amount per member per month. Low or no deductibles and set copayments, but no coverage outside the panel.

Most dental plans sort procedures into classes of service, each with its own coinsurance:

Class I, preventive and diagnostic — exams, cleanings, X-rays. Typically paid at 100%,

often with no deductible, to encourage the care that prevents bigger claims.

Class II, basic or restorative — fillings, simple extractions, often root canals and

gum treatment. Typically 80%.

Class III, major — crowns, bridges, dentures, implants. Typically 50%.
Orthodontics — often covered only for children, at about 50%, with a separate

lifetime maximum.

Dental plans control cost with limits that major medical rarely uses. Florida's provider-contract statute lists the usual ones when it defines covered dental services: deductibles, coinsurance, waiting periods, annual or lifetime maximums, frequency limitations, and alternative benefit payments (§ 627.6474(2)).

The annual maximum is the most the plan pays per person per year. Unlike a major medical

out-of-pocket maximum, it caps the insurer, not the insured.

Waiting periods keep people from buying a policy just before expensive work, commonly

six to twelve months for major services.

Frequency limitations cap how often a service is paid, such as two cleanings a year.
An alternative benefit provision pays for the least costly professionally acceptable

treatment, such as a filling instead of a crown, and the insured pays the difference.

A missing-tooth clause excludes replacing a tooth lost before coverage began.
Predetermination (a pretreatment estimate) lets the dentist and patient learn what the

plan will pay before costly work starts.

Florida also protects dentists: an insurer's contract may not require a dentist to charge an insurer-set fee for services that are not covered under the insured's contract. A service denied only because of a deductible, waiting period or maximum still counts as covered (§ 627.6474(2)).

Vision insurance

Vision coverage pays for routine eye care: an annual eye examination and eyewear. Benefits are usually a mix of copayments (for example, a set copay for the exam) and allowances (a fixed dollar amount toward frames or contact lenses), with frequency limits such as an exam every 12 months and frames every 24 months. In-network care is paid more generously than out-of-network care, which is usually reimbursed from a schedule.

Vision plans cover routine care, not eye disease. Treatment for glaucoma, cataracts or an eye injury is medical care and falls under the major medical plan.

Florida limits how insurers manage vision networks. An insurer may not force an ophthalmologist or optometrist to join a network only to be credentialed for another insurer's vision network, and may not restrict eye-care providers to specific suppliers or optical laboratories. It may still pay different amounts for network and out-of-network suppliers (§ 627.6474(3)(a)-(b)).

Specified-disease insurance

A specified-disease policy (also called dread disease insurance) pays only if the insured is diagnosed with, or treated for, a disease named in the policy. Cancer policies are the most common; others list several conditions such as heart attack or stroke. Benefits are paid in one of two ways:

a lump sum on first diagnosis, or
scheduled fixed amounts for each day in the hospital, each treatment, or each

surgery.

The key features:

Benefits are paid regardless of any other coverage, usually directly to the insured,

who can spend the money on anything: deductibles, travel for treatment, lost income.

The policy is a supplement. It pays nothing for any other illness, so it can never

stand in for major medical.

Policies commonly have a waiting period, and a disease diagnosed during it is not

covered.

Because it is not a comprehensive plan, specified-disease coverage is outside several Florida health mandates. For example, the required coverage for child health supervision services does not apply to specified disease or hospital indemnity policies (§ 627.6416(3); § 627.6579(3)).

Producer tip: these policies are sold on fear and on price. Make sure the client understands what the policy does not cover, and that it supplements, never replaces, a major medical plan.