Is pediatric dental coverage included in exchange plans?

Q. Can you explain the requirements for pediatric dental coverage? I’ve read that it’s an essential health benefit that has to be covered on all health insurance plans, but I’m also hearing that it’s optional?

A. It depends. There is no penalty for not having pediatric dental on your policy. And in most exchanges, you can purchase a plan without pediatric dental. But off-exchange, carriers are required to include pediatric dental unless they have determined that you have pediatric dental from another source.

Pediatric dental coverage is one of the ten essential health benefits (EHBs) that the ACA has required on all individual and small group plans since 2014. But section 1302 of the ACA (see page 61) explains that a policy sold in an exchange without embedded pediatric dental coverage can still be a qualified health plan (QHP) as long as there is also a stand-alone pediatric dental plan available in the exchange.

Exchanges must offer pediatric dental insurance, either via coverage that is embedded in the medical plans, or in separate stand-alone plans. But in most states, enrollees are not required to have pediatric dental coverage if they buy a health plan through the exchange, even if there are children on the policy, as long as there are stand-alone pediatric dental plans available for purchase. They can simply purchase a QHP that does not have pediatric dental and will have satisfied the ACA’s individual mandate (there is no longer a federal penalty for non-compliance with the individual mandate, but this was the case even when a penalty existed).

Most states leave it up to the insurers to determine whether to embed pediatric dental coverage. There are some exceptions, though. For example, Washington State exchange enrollees are required to purchase pediatric dental coverage; Covered California began requiring all health plans sold through the exchange to have embedded pediatric dental coverage starting in 2015. And the exchanges in Connecticut and Maryland also require all medical plans to include embedded pediatric dental coverage.

Each year, for plans sold through the federally-run marketplace (HealthCare.gov; currently used in 33 states), the federal government notifies medical insurers about whether or not stand-alone dental plans will be available through the marketplace in each area. In areas where they will be available, the medical insurers are not required to embed pediatric dental coverage. But in areas where no stand-alone dental plans will be sold through the marketplace, the participating medical insurers do have to embed pediatric dental benefits in their plans.

How common is embedded pediatric dental insurance?

The American Dental Association conducted an analysis of embedded dental coverage in health insurance plans sold through the exchanges in 2015. They studied 40 states, although only three of them (California, Vermont, and Washington) had their own exchanges. The study found that in 27 of the states, dental benefits were embedded in less than half of the available health plans – and in three states, dental benefits weren’t embedded in any of the plans.  

Of the plans that did include embedded dental coverage, the vast majority (573 out of 597) only included pediatric dental, not coverage for adults. Virtually everyone who wants adult dental insurance must purchase it as additional coverage.

An ADA analysis of health plans available via HealthCare.gov found that from 2014 through 2016, the number of plans with embedded pediatric dental benefits grew by nearly 50%, from 659 plans in 2014 to 986 plans in 2016.

And as of 2020, a Milliman analysis found wide variation in terms of the availability of embedded pediatric dental in the 38 states that used HealthCare.gov that year. Six of those states had no plans with embedded pediatric dental, 24 states had at least some plans that included embedded pediatric and/or adult dental benefits, and the other eight states had too much variation to fit into any one category. The Milliman analysis did note that Silver-level plans were the most likely to have embedded pediatric dental coverage.

Milliman also found that the availability of stand-alone qualified dental plans in the exchange (for both children and adults) varied considerably from one state to another: South Dakota had just one carrier offering these plans, while Texas and Florida each had 13.

Pediatric dental coverage required off-exchange

If you shop off-exchange, pediatric dental is required. If you purchase an off-exchange plan, the carrier must be “reasonably assured” that you have exchange-certified pediatric dental coverage in place in order to sell you a policy without pediatric dental.

If you have no children under age 19 on your application and you’re shopping off-exchange, you may be able to purchase a zero-premium “adult pediatric” dental plan. (Talk with your broker or insurance carrier to see if this is available.) You wouldn’t pay anything for the policy, but since it only covers children, it wouldn’t provide any dental coverage for adults on the plan.

If you do have children under 19 on your application and you’re shopping off-exchange, you are not allowed to opt out of pediatric dental coverage. You must either purchase pediatric dental coverage (embedded with your plan or as a supplemental policy) or attest to the fact that you already have it from another source.

Dental insurance coverage conforms to ACA regulations

Pediatric dental coverage that is certified by the health insurance marketplace/exchange has to conform to some ACA regulations, including a ban on lifetime and annual benefit limits. This is a big change from pre-2014 individual dental plans, which typically had low annual limits. But not all services are covered on the new plans – for example, orthodontia is generally not covered unless it’s “medically necessary,” which is different from cosmetically necessary.

Maximum out-of-pocket limits and actuarial value for pediatric dental insurance plans

As of 2022, the maximum out-of-pocket on stand-alone pediatric dental plans that are certified by the exchange/marketplace is $375 for a single child, and $750 per family if more than one child is covered on the plan. These limits will remain unchanged for 2023.

In 2014, the maximum out of pocket was $700 per child or $1,400 for all the children in a family. These limits were cut in half as of 2015, and those new limits — $350 for one child, and $700 for multiple children — remained in place from 2015 through 2021.

An inflation adjustment process began to be used as of 2017, but it rounds down to the nearest $25, and the inflation adjustments for 2017 through 2021 were less than $25, so the caps did not change. They adjusted upward by $25 as of 2022 (the inflation adjustment amount was actually almost $33, but because it’s rounded down to the nearest $25, the cap only increased by $25). For 2023, the inflation adjustment process would actually bring the out-of-pocket maximum to about $394 for one child, but again, it’s rounded down to the nearest $25 increment, leaving it unchanged at $375.

(Note that if a stand-alone dental plan is not certified by the exchange, it does not have to comply with the ACA’s rules for pediatric dental coverage. Exchange-certified stand-alone dental plans can also be sold outside the exchange. But stand-alone dental plans that are not ACA-compliant can be sold outside the exchange as well. This is different from the major medical insurance market, where plans must be ACA-compliant regardless of whether they’re sold on-exchange or off-exchange.)

Through 2018, stand-alone pediatric dental plans certified by the marketplace/exchange had to provide either provide “high” (85%) or “low” (70%) actuarial value. But HHS eliminated this requirement as of 2019, in order to give insurers more flexibility in designing plans. The maximum out-of-pocket limits described above still apply, and HHS continues to require stand-alone dental plans to receive certification of their actuarial value from a member of the American Academy of Actuaries, and report the certified AV to the exchange (HHS had proposed eliminating that requirement, but decided to keep it instead).

But if the pediatric dental coverage is embedded with a medical plan, the policy can be designed so that dental expenses are applied towards the deductible and only covered after the deductible is met. This is a common scenario on plans with embedded pediatric dental, although preventive pediatric dental care is sometimes covered before the deductible is met. Health plans can have maximum out-of-pocket costs as high as $8,700 for a single person in 2022 (that cap increases to $9,100 in 2023), and that could include pediatric dental costs if the coverage is embedded in the medical plan.

Preventive pediatric dental care may be covered in full, but it doesn’t have to be

It’s important to understand that services we typically think of as preventive dental treatment are mostly not included in the specific list of preventive services that the ACA requires plans to cover for free for all children. The only services related to dental care on that list are fluoride supplements for kids without access to fluoride in their water, fluoride varnish for infants and children, and oral health risk assessments for young children. So things like dental cleaning and x-rays do not fall under the umbrella of free preventive care under the ACA.

If you buy an exchange-certified stand-alone pediatric dental plan, there’s a good chance those benefits will be covered in full or with relatively low cost-sharing (and allowing for free or very low-cost preventive and routine dental care is part of the reason HHS eliminated the actuarial value categories for pediatric dental plans). If you have embedded pediatric dental, it’s up to the carrier to design the benefits, but you may still find that you have access to routine cleanings for your kids at little or no cost.

State-based exchanges can implement their own requirements though. Covered California is an example: All of their health plans include pediatric dental, and preventive dental care (x-rays, exams, cleanings, and sealants) are covered in full, even if the member has not met the deductible yet.

Premium subsidies and pediatric dental insurance

Although pediatric dental is one of the essential health benefits, premium subsidies are not necessarily available to help cover the cost of the plan if it’s purchased as a separate stand-alone coverage.

Premium subsidies are determined based on the cost of the benchmark plan, the cost of the plan the applicant selects, and the applicant’s income (here’s more on how all of this works). And although the benchmark plan is normally just the second-lowest-cost silver plan in a given area, it’s a little bit more complicated if some of the available silver plans include embedded pediatric dental and some do not.

In that case, under 26 CFR § 1.36B-3(f)(3), the benchmark determination is different; you can’t just order all of the silver plans based on premium and see which one has the second-lowest cost. Instead, you look at the available stand-alone dental plans and see what portion of their premium is allocated to pediatric dental benefits (the dental plans provide this information to the exchange). Then you add that amount to the premiums of each of the available silver plans that don’t include embedded dental coverage.

This will give you new (higher) premiums for the silver plans that don’t have embedded dental, but nothing will change about the silver plans that do have embedded dental. Then you put the silver plans in order again, based on premium — with the cost of the pediatric portion of a stand-alone dental plan added to any plans that don’t otherwise include pediatric dental coverage.

And from that list, the second-lowest-cost plan is determined. (See the examples at the bottom of section (f) in 26 CFR § 1.36B-3, as they help to make it clear.) The short story is that the total subsidy amount that’s available to a household may or may not be based on adding a portion of the cost of a separate stand-alone dental plan — it depends on what silver plans are available in the exchange to each applicant, and how the premiums stack up against each other when the cost of a stand-alone dental plan is added to the cost of the silver plans (if any) that don’t include embedded pediatric dental coverage.

(Note that this is a newer rule, which took effect in 2019 (see pages 91760-91761). Prior to that, premium subsidies were based on the cost of the second-lowest-cost silver plan — without accounting for the cost of stand-alone pediatric dental plans — even if the available plans did not include embedded pediatric dental.)

Embedded or stand-alone – pros and cons for each

In many states, consumers have an option to pick either a medical plan that includes embedded pediatric dental coverage, or a stand-along pediatric dental plan purchased in addition to the family’s medical coverage. Here’s a summary of the pros and cons of each option:

Embedded pediatric dental insurance:

• Children are more likely to have dental coverage when health plans embed it in their policies, as the family doesn’t have to purchase a separate dental plan.
• Premium subsidies can offset a portion (or all, in some cases) of the cost of the overall medical plan, including the cost of the pediatric dental coverage.
• The plan’s maximum out-of-pocket can be as high as $8,700 for a single individual in 2022 (or as high as $9,100 in 2023). That can include a combination of medical and dental bills, so a child who needs extensive dental care but no other medical care could end up with substantial out-of-pocket dental costs.
• The plan can require the child to meet a combined deductible for medical/dental care, which can mean that the family has to pay thousands of dollars in out-of-pocket costs before the plan starts to pay for dental care.

Stand-alone pediatric dental insurance:

• A separate plan has to be purchased, in addition to the family’s medical coverage.
• Premium subsidies may or may not be available to cover part of the stand-alone dental plan premium (see explanation above).
• Maximum out-of-pocket costs for the stand-alone pediatric dental plan cannot exceed $375 for one child, or $750 for two or more children in the family (as explained here, these limits were adjusted for inflation as of 2022). For a child who needs extensive dental work, a stand-alone policy can result in far lower out-of-pocket costs than a medical plan with embedded dental coverage.
• The deductible tends to be very low (it has to be low, given the low limits on maximum out-of-pocket), so benefits for dental work tend to kick in right away, even if the child only needs fairly minor dental work.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.