With rising insurance frustrations and growing demand for transparent, patient-friendly payment options, many dental practices are turning to in-house membership plans. These plans offer patients predictable, subscription-style access to preventive care and discounts on additional treatment — without the red tape of traditional insurance.

But before you roll one out, it’s important to ask:

Are there state or federal regulations I need to follow when offering an in-house dental membership plan?

The answer is yes — but it depends on your location and plan structure.

Here’s a breakdown of what you need to consider to keep your plan compliant, legal, and patient-friendly.

1. Understand the Difference Between Insurance and Membership

First, let’s clarify:

• A dental insurance plan is a regulated insurance product, governed by state and federal insurance laws.

• An in-house membership plan is a direct agreement between your practice and the patient, typically involving:

  • A recurring fee (monthly or annual)

  • Included preventive services (e.g., exams, X-rays, cleanings)

  • Discounts on additional treatment

If your plan does not involve risk transfer (i.e., you are not pooling money to pay for services beyond what’s included), it’s generally not considered insurance — but it still may be regulated as a discount or service plan in your state.

2. State Laws Vary — Some Regulate Membership Plans, Others Don’t

Most states do not treat in-house membership plans as insurance, but some require registration, disclosures, or specific contract terms.

For example:

• Texas, Illinois, and Nevada require registration as a “Discount Medical Plan Organization” (DMPO) if you offer discounts on services beyond what’s included in the fee.

• California has specific language around consumer protections and fee transparency.

• Florida requires that plans be structured carefully to avoid being classified as prepaid insurance.

Tip: Contact your state dental board or department of insurance to ask:

“Do in-house dental membership plans require registration, licensing, or specific disclosures in this state?”

3. Federal Laws to Consider (HIPAA, Antikickback, etc.)

While federal law doesn’t directly regulate in-house membership plans like it does insurance, you still need to stay compliant with:

HIPAA

You must safeguard patient data collected through plan enrollment, especially if it’s processed online or via third-party software.

Anti-Kickback Statutes (AKS)

If you refer patients to specialists or other providers who offer reciprocal discounts or benefits, be cautious. Avoid any arrangement that could be interpreted as “fee for referral.”

Truth in Advertising / FTC Guidelines

Be transparent in your marketing. Avoid terms like “insurance alternative” or “better than insurance” unless you're clearly explaining that your plan is not insurance.

4. Best Practices for a Compliant Membership Plan

To minimize regulatory risk and keep your plan patient-friendly:

Have a clear written agreement

• State what's included (cleanings, exams, etc.)

• Define any discounts and exclusions

• Clarify cancellation and refund policies

Disclose it’s NOT insurance
Use a disclaimer like:

“This is not dental insurance. It cannot be combined with any dental insurance plan. This is a membership discount plan offered directly by our practice.”

Avoid prepaying for services far in advance
This can trigger regulatory scrutiny. Monthly billing or modest annual fees are generally safer.

Use third-party platforms when appropriate
Companies like BoomCloud, Kleer, Bento, or Smile Advantage specialize in dental membership plan compliance and may offer legal guidance or pre-approved templates.

Bonus: Watch Out for ERISA and Coordination of Benefits

In-house membership plans do not coordinate with insurance — meaning:

• If a patient has insurance, don’t submit claims or discounts as if you’re participating in their plan.

• Keep memberships separate from PPO contracts to avoid violating network agreements.

Final Thoughts

An in-house membership plan can be a powerful tool to reduce insurance dependence, increase case acceptance, and provide value to uninsured patients — but it’s not a set-it-and-forget-it system.

To stay compliant:

• Understand your state’s specific rules

• Draft clear terms and disclosures

• Avoid practices that resemble prepaid insurance

• Keep your legal bases covered

Done right, your membership plan can be both legally sound and highly profitable.

Benjamin Tuinei

Founder - Veritas Dental Resources, LLC
Phone: 888-808-4513

Services:
PPO Fee Negotiators | PPO Fee Negotiating | Insurance Fee Negotiating
Insurance Credentialing | Insurance Verifications

Websites:
www.VeritasDentalResources.com | www.VerusDental.com