From time to time, your Tidewater Consulting team will share information via our blogs. These short, informative posts are designed to answer common questions, share relevant industry trends, and to strengthen and encourage the communities that we serve. The knowledge that is expressed in these posts represents 35 years of practical experience in medical / dental billing and coding, compliance, and administration of insurance. If there is a topic or issue you’d like us to consider please contact us.

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Understanding the concept of a benefit reserve is crucial for dentists and dental team members who handle insurance claims. While this term is commonly applied to fully insured plans, it can also apply to self-funded and federal plans. In this article, we will dive into the specifics of a benefits reserve, its purpose, and how it impacts dental insurance claims.

A benefits reserve, sometimes known as a credit reserve or COB (Coordination of Benefits) savings bank, comes into play when a secondary plan saves money on claims due to primary coverage being in place. State laws regulating insurance may require these savings to be recorded as a benefit reserve. The purpose of this reserve is to allow the plan to utilize the saved funds to cover allowable expenses that would otherwise remain unpaid during the plan year.

Let’s consider an example to illustrate this concept. Suppose a patient has reached their annual maximum coverage under the primary plan, and additional benefits are required for further treatments. In such cases, the benefit reserve funds can cover these extra expenses. These funds are essentially the money the secondary plan saves when acting in a secondary capacity.

It’s important to note that many states still enforce the establishment of benefit reserves for COB savings in state-licensed secondary plans. Therefore, it becomes crucial for dental providers to submit claims to secondary plans. By doing so, the secondary plan can determine the amount it would have paid if it were primary and allocate the saved money to the patient’s benefit reserve. These reserve funds can cover future claims, potentially alleviating deductibles and copayments the patient would otherwise have to pay out-of-pocket.

The presence of a benefit reserve can often result in secondary carriers paying more than expected on a claim. This additional coverage can extend up to 100% of allowable charges that the secondary plan would not typically cover. Thus, understanding the utilization of a benefit reserve can significantly benefit dental providers and their patients.

How the benefit reserve works

Mrs. Smith had a claim for osseous surgery for $1,800. Her primary plan paid $900, leaving her a balance of $900. The secondary plan received the claim and noted that its benefit would have been $1,260 if it were primary. Mrs. Smith’s secondary plan paid the remaining balance of $900 and deposited the $360 it saved as the secondary plan into Mrs. Smith’s “benefit reserve.” 

Later that same year, Mrs. Smith received a bruxism appliance, which was a covered benefit of her primary plan but not her secondary plan. Her bill was $450. Her primary plan paid $225, and her secondary plan paid the remaining balance of $225 from her benefit reserve account.

Sample Explanation of Benefits (EOB)

The patient received a payment of $197.40 due to COB savings or benefits reserve. The provider of service received the remaining $48 of the benefit.


A benefit reserve is critical in dental insurance claims, particularly coordinating benefits scenarios. Dentists and dental team members should be aware of the concept and its implications to maximize coverage for their patients. By proactively understanding and utilizing benefit reserves, dental practices can provide enhanced financial support to their patients while ensuring proper reimbursement for their services.

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