In dental plan design, which feature helps prevent adverse selection by delaying coverage for some benefits?

• A. Waiting periods
• B. Immediate coverage
• C. Waivers of premium
• D. Age-based pricing

Answer: (A)

Waiting periods are used to slow down access to certain benefits after someone enrolls, which helps control adverse selection. In a dental plan, this means you can cover routine preventive care right away, but postpone eligibility for more expensive services (like major restorations or orthodontics) for a set period. This discourages people who expect to need a lot of care from joining just to get immediate benefits, because they’ll have to wait or miss those costly services at enrollment. By delaying coverage for those benefits, the plan pools risk more evenly and reduces the incentive for high-claim individuals to enroll solely to receive large upfront payouts.

Immediate coverage would raise adverse selection by letting high-need applicants use benefits immediately. Waivers of premium don’t address when benefits become available, and age-based pricing adjusts cost rather than delaying coverage, so they don’t accomplish the same risk-mitigation effect.