Final answer:
Jerry's indemnity plan will typically reimburse him for dental expenses after he has paid for services. Indemnity plans are a form of direct-purchase insurance where the policyholder is compensated for claims based on the policy's terms.
Step-by-step explanation:
Jerry has an indemnity plan that covers dental expenses. Typically, these types of plans reimburse the policyholder for dental care expenses incurred. This is characteristic of private insurance, where policyholders make regular payments to an insurance entity, and in return, they may get compensated after submitting claims for covered services. Indemnity plans are a form of direct-purchase insurance, which differs from employment-based insurance that might be provided in part by an employer. With an indemnity plan, Jerry may have to pay upfront for dental services but will receive a reimbursement from the insurance provider afterward, based on the terms of his policy. It's noteworthy that methods to reduce moral hazard can include deductibles, copayments, and coinsurance, which can all be part of an indemnity plan's structure.