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:

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

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adding thereto the following chapter:

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CHAPTER 82

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DENTAL INSURANCE LOSS RATIO REPORTING AND STUDY ACT

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     27-82-1. Short title.

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

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Reporting and Study Act."

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     27-82-2. Legislative Findings.

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

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

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

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such coverage in certain jurisdictions.

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

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consideration in certain jurisdictions.

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

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

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

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

 

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

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dental insurance.

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

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

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

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

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

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

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

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

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     27-82-3. Definitions.

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

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

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in § 27-18-1.1.

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

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

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

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

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this title;

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

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

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

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and/or

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

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

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

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

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

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

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health insurance carrier, is responsible for payment.

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

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

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

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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

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

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including utilization review.

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

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

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     27-82-4. Reporting.

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

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

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

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

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

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in accordance with this chapter.

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     27-82-5. Exemptions.

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

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

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administrator.

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     27-82-6. Regulations.

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

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

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     27-82-7. Study report.

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

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

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recommendations with respect to a minimum dental loss ratio.

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

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

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

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

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

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

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

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

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

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

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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

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shall be deposited as general revenue.

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     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

***

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

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

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

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

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

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

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costs of the study report.

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     This act would take effect upon passage.

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