Section 2: Approval of dental benefit policies; information to be submitted to the commissioner; group product base rates; medical loss ratio; disapproval of proposed rate change
[Text of section applicable to all dental benefit plans issued, made effective, delivered or renewed on or after January 1, 2024. See 2022, 287, Sec. 4.]
Section 2. (a) Notwithstanding any general or special law to the contrary, the commissioner may approve dental benefit policies submitted to the division of insurance for the purpose of being provided to individuals and groups. These dental benefit policies shall be subject to this chapter and may include networks that differ from those of a dental plan's overall network. The commissioner shall adopt regulations regarding eligibility criteria.
(b) Notwithstanding any general or special law to the contrary, the commissioner shall require carriers offering dental benefit plans to submit information as required by the commissioner, which shall include the current and projected medical loss ratio for plans the components of projected administrative expenses and financial information, including, but not limited to: (i) underwriting, auditing, actuarial, financial analysis, treasury and investment expenses; (ii) 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 (iii) 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; (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 expense.
(c) Notwithstanding any general or special law to the contrary, carriers offering dental benefit plans, including carriers licensed under chapters 175, 176B, 176E, 176G or 176I, shall file group product base rates and any changes to group rating factors that are to be effective on January 1 of each year, on or before July 1 of the preceding year. The commissioner shall disapprove any proposed changes to base rates that are excessive, inadequate, or unreasonable in relation to the benefits charged. The commissioner shall disapprove any change to group rating factors that is discriminatory or not actuarially sound. The commissioner shall adopt regulations to carry out this section.
(d) If a carrier files a base rate change under this section and the administrative expense loading component, not including taxes and assessments, increases by more than the most recent calendar year's percentage increase in the dental services consumer price index (U.S. city average, all urban consumers, not seasonally adjusted) or if a carrier's reported contribution to surplus exceeds 1.9 per cent or if the aggregate medical loss ratio for all plans offered under this chapter is less than the applicable percentage set forth in subsection (e), then such carrier's rate, in addition to being subject to all other provisions of this chapter, shall be presumptively disapproved as excessive by the commissioner as set forth in this subsection. If the annual aggregate medical loss ratio for all plans offered under this chapter is less than the applicable percentage set forth in subsection (e), the carrier shall refund the excess premium to its covered individuals and covered groups. A carrier shall communicate within 30 days to all individuals and groups that were covered under plans during the relevant 12–month period that such individuals and groups qualify for a refund on the premium for the applicable 12–month period or, if the individual or groups are still covered by the carrier, a credit on the premium for the subsequent 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 (e), 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.
(e) The medical loss ratio set forth in subsection (d) shall be 83 percent.
(f) If a proposed rate change has been presumptively disapproved: (i) a carrier shall communicate to all employers and individuals covered under a group product that the proposed increase has been presumptively disapproved and is subject to a hearing at the division of insurance;
(ii) the commissioner shall conduct a public hearing and shall advertise that hearing in newspapers in the cities of Boston, Brockton, Fall River, Pittsfield, Springfield, Worcester, New Bedford and Lowell, or shall notify such newspapers of the hearing; and
(iii) the attorney general may intervene in a public hearing or other proceeding under this section and may require additional information as the attorney general considers necessary to ensure compliance with this subsection. The commissioner shall adopt regulations to specify the scheduling of the hearings required under this section and to otherwise carry out this subsection (f).
(g) If the commissioner disapproves the rate submitted by a carrier the commissioner shall notify the carrier in writing no later than 45 days prior to the proposed effective date of the carrier's rate. The carrier may submit a request for hearing to the division of insurance within 10 days of such notice of disapproval. The division must schedule a hearing within 15 days of receipt. The commissioner shall issue a written decision within 30 days after the conclusion of the hearing. The carrier may not implement the disapproved rates, or changes at any time unless the commissioner reverses the disapproval after a hearing or unless a court vacates the commissioner's decision.