2024 -- S 2873

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LC005635

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

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A N   A C T

RELATING TO INSURANCE -- DENTAL INSURANCE LOSS RATIO REPORTING AND

STUDY ACT

     Introduced By: Senator Matthew L. LaMountain

     Date Introduced: March 22, 2024

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 27 of the General Laws entitled "INSURANCE" is hereby amended by

adding thereto the following chapter:

CHAPTER 82

DENTAL INSURANCE LOSS RATIO REPORTING AND STUDY ACT

     27-82-1. Short title.

     This chapter shall be known and may be cited as the "Dental Insurance Loss Ratio

Reporting and Study Act."

     27-82-2. Legislative Findings.

     (1) Loss ratios generally measure costs associated with insurance claims as a percentage of

premiums earned. They have been used as a useful metric in connection with medical, surgical and

prescriptive drug coverage for many years. Minimum loss ratio levels have been established for

such coverage in certain jurisdictions.

     (2) Loss ratios with respect to dental insurance have in recent years become a matter of

consideration in certain jurisdictions.

     (3) Because of the significantly different cost and premium structures between medical and

dental insurance, with medical premiums being at least twenty (20) times greater than dental

premiums, sometimes even significantly more, there has been substantial debate in other

jurisdictions as to whether minimum dental loss ratios are appropriate and, more particularly, what

minimum dental loss ratio calculation would be appropriate in view of the unique economics of

dental insurance.

     (4) The great majority of the jurisdictions that have considered the issue have preceded the

formal establishment of a minimum dental loss ratio with reporting legislation, and related studies,

to evaluate particular market dynamics and metrics and provide an appropriate actuarially informed

data set baseline period upon which to establish an annual minimum dental loss ratio.

     (5) There is precedent elsewhere that the establishment of a minimal minimum dental loss

ratio without actuarial and policy analysis, can have harmful unintended consequences for

jurisdictions, particularly with respect to the small group market, from dental carriers ceasing to do

business in the jurisdiction, as well as difficulties in regulatory implementation and increased costs.

     27-82-3. Definitions.

     As used in this chapter, the following terms shall mean:

     (1) "Commissioner" or "health insurance commissioner" shall have the meaning set forth

in § 27-18-1.1.

     (2) "Dental health insurance carrier" means a health insurance carrier, as defined in § 27-

18-1.1, to the extent that it provides insured dental services benefits coverage, including any entity

providing individual or group coverage for dental or oral surgery services or procedures:

      (i) Through an individual or group policy of health, accident and sickness insurance under

this title;

     (ii) As a nonprofit hospital service corporation organized under chapter 19 of this title;

     (iii) As a nonprofit medical service corporation organized under chapter 20 of this title;

     (iv) As a nonprofit dental service corporation organized under chapter 20.1 of this title;

and/or

     (v) As a health maintenance organization organized under chapter 41 of this title.

     (3) "Earned premiums" means, for a reporting year, the premium received up to the loss

measurement ratio date for coverage provided during the reporting year minus federal and state

taxes and assessments and pass through payments made by the dental health insurance carrier as a

billing convenience for commissions or fees charged by a broker or consultant retained by the group

or individual receiving coverage, and for which the group or individual, as opposed to the dental

health insurance carrier, is responsible for payment.

     (4) "Health insurance carrier" shall have the same meaning set forth in § 27-18-1.1.

     (5) "Incurred claims" means, for a reporting year, the claims for which services were

provided in the reporting year, including an estimate of unpaid claim reserves and incurred value

based care incentive pool and bonuses, the costs related to improving health care quality and access,

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fraud reduction, charitable contributions to nonprofit entities to improve access to dental care to

the disadvantaged and underserved population, and costs incurred for dental care management,

including utilization review.

     (6) "Reporting year" means a calendar year during which group or individual dental

coverage is provided by a policy, contract, or certificate covering dental services.

     27-82-4. Reporting.

     Notwithstanding any provision of the general laws to the contrary, dental health insurance

carriers shall, on or before July 31 of 2025, 2026 and 2027, (the "transition period"), file with the

commissioner, in a format prescribed by the commissioner, an actuarial memorandum disclosing

its incurred claims and earned premiums for the preceding calendar reporting year, together with

such additional information as may be provided for in regulations promulgated by the commission

in accordance with this chapter.

     27-82-5. Exemptions.

     The reporting required by this chapter shall not apply to dental insurance plans issued,

delivered or renewed to a self-insured group or where the carrier is acting as a third-party

administrator.

     27-82-6. Regulations.

     The commissioner shall, by January 1, 2025, promulgate rules and regulations as are

necessary to carry out and effectuate the provisions of this chapter.

     27-82-7. Study report.

     (a) On or before January 1, 2028, the commissioner shall provide the general assembly

with an analysis of the reporting information furnished pursuant to § 27-82-4, and

recommendations with respect to a minimum dental loss ratio.

     (b) The commissioner shall make a special annual assessment against each dental health

insurance carrier during years 2024, 2025, 2026, and 2027 for payment of all reasonable costs and

expenditures in connection with the study report and related analysis required by this section, no

greater than the combined maximum total of one hundred fifty thousand dollars ($150,000) per

year for all carriers. Each annual assessment shall, subject to the foregoing maximum, be deemed

as reasonably sufficient reimbursement for any costs and expenditures necessary for the

commissioner to fulfill the commissioners obligations under this section. The sums shall be

proportionately assessed by the commissioner against each dental health insurance carrier based on

relative annual fully insured membership enrollment, and may be billed whether or not the study

report has been completed. The carriers billed for such costs and expenditures shall make payment

to the commissioner within sixty (60) days of the date invoiced. Assessments made pursuant to this

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section may be credited to the normal operating costs of each dental health insurance carrier, and

shall be deposited as general revenue.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- DENTAL INSURANCE LOSS RATIO REPORTING AND

STUDY ACT

***

     This act would require, for years 2025, 2026 and 2027, dental health insurance carriers to

file with the health insurance commissioner an actuarial memorandum disclosing its incurred

claims and earned premiums, in order to assist the health insurance commissioner with respect to

the issuance of a study report and recommendations regarding a dental insurance loss ratio. This

act would also allow the health insurance commission to assess dental health insurance carriers an

annual maximum combined amount of one hundred fifty thousand dollars ($150,000) to defray the

costs of the study report.

     This act would take effect upon passage.

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