103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3305

 

Introduced 2/7/2024, by Sen. Laura Fine

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the Dental Loss Ratio Act. Sets forth provisions concerning dental loss ratio reporting. Provides that a health insurer or dental plan carrier that issues, sells, renews, or offers a specialized health insurance policy covering dental services shall, beginning January 1, 2025, annually submit to the Department of Insurance a dental loss ratio filing. Provides a formula for calculating minimum dental loss ratios. Sets forth provisions concerning minimum dental loss ratio requirements. Provides that the Department may adopt rules to implement the Act. Provides that the Act does not apply to an insurance policy issued, sold, renewed, or offered for health care services or coverage provided as a function of the State of Illinois Medicaid coverage for children or adults or disability insurance for covered benefits in the single specialized area of dental-only health care that pays benefits on a fixed benefit, cash payment-only basis. Defines terms. Effective January 1, 2025.


LRB103 37060 RTM 67177 b

 

 

A BILL FOR

 

SB3305LRB103 37060 RTM 67177 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be referred to as the
5Dental Loss Ratio Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Dental care provider" means a dentist who bills for
8services in Illinois.
9    "Dental loss ratio" means the ratio of incurred claims to
10earned premiums as calculated using the formula under Section
1110 of this Act.
12    "Dental plan carrier" means an entity subject to the
13insurance laws, rules, and regulations of this State or
14subject to the jurisdiction of the Director that contracts or
15offers to contract to provide, deliver, arrange for, pay for,
16or reimburse any of the costs of dental care services,
17including an accident and health insurance company, a health
18maintenance organization, a limited health service
19organization, a dental service plan corporation, a health
20services plan corporation, a voluntary health services plan,
21or any other entity providing a plan of dental insurance,
22dental benefits, or dental health care services.
23    "Department" means the Department of Insurance.

 

 

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1    "Director" means the Director of Insurance.
2    "Earned premiums" means the portion of the premium paid in
3the reporting year that is intended to provide coverage during
4that reporting period.
5    "Incurred claims" means the claims for which services were
6provided in that reporting year. "Incurred claims" includes
7claims that were paid in the reporting year plus unpaid claim
8reserves for claims paid after the reporting year.
 
9    Section 10. Dental loss ratio reporting.
10    (a) A health insurer or dental plan carrier that issues,
11sells, renews, or offers a specialized health insurance policy
12covering dental services shall, beginning January 1, 2025,
13annually submit to the Department the dental loss ratio
14calculated in accordance with subsection (c). The annual
15filing shall, at a minimum, include rates, rating schedules,
16and supporting documentation, including ratios of incurred
17claims to earned premiums for each calendar year since the
18plan's issuance. The required information shall be in the form
19established by the Department and shall demonstrate that each
20plan complies with the minimum dental loss ratio standards.
21    (b) The annual filing shall be made publicly available on
22the Department's website.
23    (c) The dental loss ratio for a dental plan or dental
24coverage of a health benefit plan shall be determined by
25dividing the numerator by the denominator as follows:

 

 

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1        (1) The numerator is the amount spent on dental care.
2    The amount spent on dental care includes:
3            (A) the amount expended for clinical dental
4        services that are services within the American Dental
5        Association's Code on Dental Procedures and
6        Nomenclature provided to enrollees that includes
7        payments under capitation contracts with dental
8        providers and covered by the contract for dental
9        clinical services or supplies covered by the contract;
10            (B) reserves and liabilities established to
11        account for claims that were incurred during the
12        reporting year but were not paid within 3 months of the
13        end of the reporting year; and
14            (C) any claim payment recovered by insurers from
15        providers or enrollees using utilization management
16        efforts that will be deducted from incurred claims
17        amounts.
18        (2) The calculation of the numerator does not include:
19            (A) overpayments that have already been received
20        from providers that should not be reported as a paid
21        claim; overpayment recoveries received from providers
22        must be deducted from incurred claims amounts;
23            (B) administrative costs, including, but not
24        limited to, infrastructure, personnel costs, or broker
25        payments;
26            (C) amounts paid to third-party vendors for

 

 

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1        secondary network savings;
2            (D) amounts paid to third-party vendors for
3        network development, administrative fees, claims
4        processing, and utilization management; or
5            (E) amounts paid to providers for professional or
6        administrative services that do not represent
7        compensation or reimbursement for covered services
8        provided to an enrollee, including, but not limited
9        to, dental record copying costs, attorney's fees,
10        subrogation vendor fees, compensation to
11        paraprofessionals, janitors, quality assurance
12        analysts, administrative supervisors, secretaries to
13        dental personnel, and dental record clerks.
14        (3) The denominator is the total amount of the earned
15    premium revenues, excluding federal and State taxes and
16    licensing and regulatory fees paid after accounting for
17    any payments pursuant to federal law. In this paragraph,
18    "earned premium revenues" means all moneys paid by a
19    policyholder or subscriber as a condition of receiving
20    coverage from the issuer, including any fees or other
21    contributions associated with the dental plan.
22    (d) If the Director decides to conduct an examination
23because the Director finds it necessary to verify a health
24insurer's or dental plan carrier's representation in a dental
25loss ratio report, then the Department shall provide the
26health insurer or dental plan carrier with a notification 30

 

 

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1days before the commencement of the examination.
2    (e) The health insurer or dental plan carrier shall have
330 days after the date of notification to electronically
4submit to the Department all requested records specified by
5the Department. The Director may extend the time for a health
6insurer or dental plan carrier to comply with this examination
7upon a finding of good cause.
 
8    Section 15. Dental loss ratio requirement.
9    (a) A health insurer or dental plan carrier that issues,
10sells, renews, or offers a specialized health insurance policy
11covering dental services shall meet a minimum dental loss
12ratio requirement of 80%.
13    (b) If the minimum dental loss ratio is not met, then the
14Department shall require a corrective action plan from the
15carrier to return excess premiums.
 
16    Section 20. Rulemaking. The Department may adopt rules to
17implement this Act.
 
18    Section 25. Exemptions. This Act does not apply to an
19insurance policy issued, sold, renewed, or offered for health
20care services or coverage provided as a function of the State
21of Illinois Medicaid coverage for children or adults or
22disability insurance for covered benefits in the single
23specialized area of dental-only health care that pays benefits

 

 

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1on a fixed benefit, cash payment-only basis.
 
2    Section 99. Effective date. This Act takes effect January
31, 2025.