2023 -- H 5497

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LC001311

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO INSURANCE -- NONPROFIT DENTAL SERVICE CORPORATIONS

     Introduced By: Representatives McNamara, Donovan, Potter, Cotter, Ackerman, and
Morales

     Date Introduced: February 10, 2023

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 27-20.1 of the General Laws entitled "Nonprofit Dental Service

Corporations" is hereby amended by adding thereto the following section:

     27-20.1-23. Medical loss ratio requirements.

     (a) Notwithstanding any general or special law to the contrary, the health insurance

commissioner (the "commissioner") shall require carriers offering dental benefit plans to annually

submit information as required by the commissioner, which shall include the current and projected

medical loss ratio for in-state claims, total claims for their plans and the components of projected

administrative expenses and financial information, including, but not limited to:

     (1) Income, including, but not limited to, any and all sources;

     (2) Underwriting, auditing, actuarial, financial analysis, treasury and investment expenses;

     (3) Marketing and sales expenses, including, but not limited to, advertising, member

relations, member enrollment and all expenses associated with producers, brokers and benefit

consultants; and

     (4) The annual report shall contain claims operations expenses, including, but not limited

to, adjudication, appeals, settlements and expenses associated with paying claims. Unless otherwise

determined by the commissioner, the following items shall be deemed to be an administrative cost

expenditure for the purposes of calculating and reporting the medical loss ratio:

     (i) Financial administration expenses;

     (ii) Marketing and sales expenses;

     (iii) Distribution expenses, including to its subsidiaries and affiliates;

     (iv) Claims operations expenses;

     (v) Medical administration expenses, such as disease management, care management,

utilization review and medical management activities;

     (vi) Network operations expenses;

     (vii) Charitable expenses;

     (viii) Board, bureau or association fees;

     (ix) State and federal tax expenses, including assessments; and

     (x) Payroll expenses.

     (b) If the annual medical loss ratio for in-state or total claims for their plans offered under

this section is less than the applicable percentage set forth in subsection (c) of this section, the

carrier shall refund the excess premium to its covered individuals and covered groups. A carrier

shall communicate within thirty (30) days to all individuals and groups that were covered under

plans during the relevant twelve (12) month period that such individuals and groups qualify for a

refund on the premium for the applicable twelve (12) month period or, if the individual or groups

are still covered by the carrier, a credit on the premium for the subsequent twelve (12) month period.

The total of all refunds issued shall equal the amount of a carrier’s earned premium that exceeds

that amount necessary to achieve a medical loss ratio of the applicable percentage set forth in

subsection (c) of this section, calculated using data reported by the carrier as prescribed under

regulations promulgated by the commissioner. The commissioner may authorize a waiver or

adjustment of this requirement only if it is determined that issuing refunds would result in financial

impairment for the carrier.

     (c) The medical loss ratio set forth in subsection (b) of this section shall be eighty-five

percent (85%).

     SECTION 2. This act shall take effect on January 1, 2024.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- NONPROFIT DENTAL SERVICE CORPORATIONS

***

     This act would require carriers offering dental benefit plans to annually submit information

which includes the current and projected medical loss ratio for claims for their plans. The medical

loss ratio would be eighty-five percent (85%) for determining whether insureds are due a refund or

premium credit in any given year.

     This act would take effect on January 1, 2024.

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