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March 30, 2023 SB 23-179
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated March 20, 2023)
Drafting Number:
Prime Sponsors:
LLS 23-0471
Sen. Moreno; Will
Rep. Hartsook; Daugherty
Date:
Bill Status:
Fiscal Analyst:
March 30, 2023
Senate Appropriations
Kristine McLaughlin | 303-866-4776
kristine.mclaughlin@coleg.gov
Bill Topic: DENTAL PLANS MEDICAL LOSS RATIO
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☒ State Diversion
☐ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
The bill allows the Division of Insurance to investigate dental plan carriers with lower
than average dental loss ratios after two years of data collection. The bill increases
state expenditures and may increase state revenue on an ongoing basis.
Appropriation
Summary:
For FY 2023-24, the bill requires an appropriation of $64,252 to the Department of
Regulatory Agencies.
Fiscal Note
Status:
This revised fiscal note reflects the introduced bill, as amended by the Senate Health
and Human Services Committee.
Table 1
State Fiscal Impacts Under SB 23-179
Budget Year
FY 2023-24
Out Year
FY 2024-25
Revenue
- -
Expenditures Cash Funds $64,252 $96,124
Centrally Appropriated $13,017 $19,897
Total Expenditures $77,269 $116,021
Total FTE 0.7 FTE 1.0 FTE
Diversion General Fund ($77,269) ($116,021)
Cash Funds $77,269 $116,021
Net Diversion $0 $0
Other Budget Impacts - -
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March 30, 2023 SB 23-179
Summary of Legislation
The bill places disclosure requirements around dental loss ratios, which are the percentage of dental
coverage premium dollars spent on services. After two years of data collection, the Commissioner of
Insurance will promulgate rules to identify carriers that significantly deviate from the average dental
loss ratio and may investigate or take enforcement action against these carriers. Additionally, the bill
requires dental coverage plans to issue identification cards.
State Revenue
The bill may increase state revenue beginning in FY 2023-24. It allows the Division of Insurance to
impose a civil penalty against carriers who fail to comply with the reporting requirements or
significantly deviate from the average dental loss ratio. This revenue is expected to be classified as a
damage award and not subject to TABOR. Given the uncertainty about the number of cases that may
be pursued, as well as the wide range in potential penalty amounts, the fiscal note cannot estimate the
potential impact of these civil penalties.
State Diversions
This bill diverts $77,269 from the General Fund in FY 2023-24 and $116,021 in FY 2024-25. This revenue
diversion occurs because the bill increases costs in the Department of Regulatory Agencies, Division
of Insurance, which is funded with premium tax revenue that would otherwise be credited to the
General Fund.
State Expenditures
The bill increases state expenditures in the Division of Insurance in the DORA by $77,000 in FY 2023-24
and $116,000 in FY 2024-25, paid from the DOI Cash fund. Expenditures are shown in Table 2 and
detailed below.
Table 2
Expenditures Under SB 23-179
FY 2023-24 FY 2024-25
Department of Regulatory Agencies
Personal Services $56,637 $94,774
Operating Expenses $945 $1,350
Capital Outlay Costs $6,670 -
Centrally Appropriated Costs
1
$13,017 $19,897
Total Cost $77,269 $116,021
Total FTE 0.7 FTE 1.0 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
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March 30, 2023 SB 23-179
Department of Regulatory Agencies
Dental loss ratio reporting. The fiscal note assumes that DOI will hire 0.7 FTE in FY 2023-24 and
1.0 FTE in FY 2024-25 and ongoing to collect data and find the average dental loss ratio and update
the information annually as well as establish rules for reporting requirements, review reports received
from carriers, and publish data. Standard operating and capital outlay costs are included for these
new staff, and first-year costs are prorated to account for the bill’s effective date. Additionally, the
bill may increase workload if the division chooses to investigate and take enforcement action against
the specified carriers. These workload increases are absorbable.
Legal services. The bill minimally increases legal service costs for the division, provided by the
Department of Law, for general counsel and rulemaking support. This can be accomplished within
existing appropriations. Legal services costs may also increase to support compliance efforts. If
additional resources are required, they will be addressed through the annual budget process.
Department of Health Care Policy and Financing
Workload will minimally increase in the Department of Health Care Policy and Financing to update
the All-Payer Health Claims Database. No appropriation is required.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming no
referendum petition is filed.
State Appropriations
For FY 2023-24, the bill requires an appropriation of $64,252 from the Division of Insurance Cash Fund
to the Department of Regulatory Agencies, and 0.7 FTE.
State and Local Government Contacts
Information Technology Regulatory Agencies Law
Health Care Policy and Financing
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit: leg.colorado.gov/fiscalnotes.