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 | |
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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: | |
1 | SECTION 1. Title 27 of the General Laws entitled "INSURANCE" is hereby amended by |
2 | adding thereto the following chapter: |
3 | CHAPTER 82 |
4 | DENTAL INSURANCE LOSS RATIO REPORTING AND STUDY ACT |
5 | 27-82-1. Short title. |
6 | This chapter shall be known and may be cited as the "Dental Insurance Loss Ratio |
7 | Reporting and Study Act." |
8 | 27-82-2. Legislative Findings. |
9 | (1) Loss ratios generally measure costs associated with insurance claims as a percentage of |
10 | premiums earned. They have been used as a useful metric in connection with medical, surgical and |
11 | prescriptive drug coverage for many years. Minimum loss ratio levels have been established for |
12 | such coverage in certain jurisdictions. |
13 | (2) Loss ratios with respect to dental insurance have in recent years become a matter of |
14 | consideration in certain jurisdictions. |
15 | (3) Because of the significantly different cost and premium structures between medical and |
16 | dental insurance, with medical premiums being at least twenty (20) times greater than dental |
17 | premiums, sometimes even significantly more, there has been substantial debate in other |
18 | jurisdictions as to whether minimum dental loss ratios are appropriate and, more particularly, what |
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1 | minimum dental loss ratio calculation would be appropriate in view of the unique economics of |
2 | dental insurance. |
3 | (4) The great majority of the jurisdictions that have considered the issue have preceded the |
4 | formal establishment of a minimum dental loss ratio with reporting legislation, and related studies, |
5 | to evaluate particular market dynamics and metrics and provide an appropriate actuarially informed |
6 | data set baseline period upon which to establish an annual minimum dental loss ratio. |
7 | (5) There is precedent elsewhere that the establishment of a minimal minimum dental loss |
8 | ratio without actuarial and policy analysis, can have harmful unintended consequences for |
9 | jurisdictions, particularly with respect to the small group market, from dental carriers ceasing to do |
10 | business in the jurisdiction, as well as difficulties in regulatory implementation and increased costs. |
11 | 27-82-3. Definitions. |
12 | As used in this chapter, the following terms shall mean: |
13 | (1) "Commissioner" or "health insurance commissioner" shall have the meaning set forth |
14 | in § 27-18-1.1. |
15 | (2) "Dental health insurance carrier" means a health insurance carrier, as defined in § 27- |
16 | 18-1.1, to the extent that it provides insured dental services benefits coverage, including any entity |
17 | providing individual or group coverage for dental or oral surgery services or procedures: |
18 | (i) Through an individual or group policy of health, accident and sickness insurance under |
19 | this title; |
20 | (ii) As a nonprofit hospital service corporation organized under chapter 19 of this title; |
21 | (iii) As a nonprofit medical service corporation organized under chapter 20 of this title; |
22 | (iv) As a nonprofit dental service corporation organized under chapter 20.1 of this title; |
23 | and/or |
24 | (v) As a health maintenance organization organized under chapter 41 of this title. |
25 | (3) "Earned premiums" means, for a reporting year, the premium received up to the loss |
26 | measurement ratio date for coverage provided during the reporting year minus federal and state |
27 | taxes and assessments and pass through payments made by the dental health insurance carrier as a |
28 | billing convenience for commissions or fees charged by a broker or consultant retained by the group |
29 | or individual receiving coverage, and for which the group or individual, as opposed to the dental |
30 | health insurance carrier, is responsible for payment. |
31 | (4) "Health insurance carrier" shall have the same meaning set forth in § 27-18-1.1. |
32 | (5) "Incurred claims" means, for a reporting year, the claims for which services were |
33 | provided in the reporting year, including an estimate of unpaid claim reserves and incurred value |
34 | based care incentive pool and bonuses, the costs related to improving health care quality and access, |
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1 | fraud reduction, charitable contributions to nonprofit entities to improve access to dental care to |
2 | the disadvantaged and underserved population, and costs incurred for dental care management, |
3 | including utilization review. |
4 | (6) "Reporting year" means a calendar year during which group or individual dental |
5 | coverage is provided by a policy, contract, or certificate covering dental services. |
6 | 27-82-4. Reporting. |
7 | Notwithstanding any provision of the general laws to the contrary, dental health insurance |
8 | carriers shall, on or before July 31 of 2025, 2026 and 2027, (the "transition period"), file with the |
9 | commissioner, in a format prescribed by the commissioner, an actuarial memorandum disclosing |
10 | its incurred claims and earned premiums for the preceding calendar reporting year, together with |
11 | such additional information as may be provided for in regulations promulgated by the commission |
12 | in accordance with this chapter. |
13 | 27-82-5. Exemptions. |
14 | The reporting required by this chapter shall not apply to dental insurance plans issued, |
15 | delivered or renewed to a self-insured group or where the carrier is acting as a third-party |
16 | administrator. |
17 | 27-82-6. Regulations. |
18 | The commissioner shall, by January 1, 2025, promulgate rules and regulations as are |
19 | necessary to carry out and effectuate the provisions of this chapter. |
20 | 27-82-7. Study report. |
21 | (a) On or before January 1, 2028, the commissioner shall provide the general assembly |
22 | with an analysis of the reporting information furnished pursuant to § 27-82-4, and |
23 | recommendations with respect to a minimum dental loss ratio. |
24 | (b) The commissioner shall make a special annual assessment against each dental health |
25 | insurance carrier during years 2024, 2025, 2026, and 2027 for payment of all reasonable costs and |
26 | expenditures in connection with the study report and related analysis required by this section, no |
27 | greater than the combined maximum total of one hundred fifty thousand dollars ($150,000) per |
28 | year for all carriers. Each annual assessment shall, subject to the foregoing maximum, be deemed |
29 | as reasonably sufficient reimbursement for any costs and expenditures necessary for the |
30 | commissioner to fulfill the commissioners obligations under this section. The sums shall be |
31 | proportionately assessed by the commissioner against each dental health insurance carrier based on |
32 | relative annual fully insured membership enrollment, and may be billed whether or not the study |
33 | report has been completed. The carriers billed for such costs and expenditures shall make payment |
34 | to the commissioner within sixty (60) days of the date invoiced. Assessments made pursuant to this |
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1 | section may be credited to the normal operating costs of each dental health insurance carrier, and |
2 | shall be deposited as general revenue. |
3 | SECTION 2. This act shall take effect upon passage. |
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LC005635 | |
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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 | |
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1 | This act would require, for years 2025, 2026 and 2027, dental health insurance carriers to |
2 | file with the health insurance commissioner an actuarial memorandum disclosing its incurred |
3 | claims and earned premiums, in order to assist the health insurance commissioner with respect to |
4 | the issuance of a study report and recommendations regarding a dental insurance loss ratio. This |
5 | act would also allow the health insurance commission to assess dental health insurance carriers an |
6 | annual maximum combined amount of one hundred fifty thousand dollars ($150,000) to defray the |
7 | costs of the study report. |
8 | This act would take effect upon passage. |
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