Requires 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%).
The introduction of S2724 could significantly influence state laws governing dental insurance by setting clear standards and expectations for how insurance companies operate within Rhode Island. This act is designed to protect consumers by ensuring that a considerable portion of their premiums is allocated toward direct dental care rather than excessive administrative overheads. The establishment of a refund mechanism may also pressure insurers to keep their operational costs in check, directly impacting their financial practices and policies.
Bill S2724, known as 'The Rhode Island Fair Share for Dental Care Act,' aims to enhance the transparency and accountability of dental benefit plans in the state. The bill requires insurance carriers offering these plans to submit annual reports detailing their medical loss ratios, which represent the percentage of premium dollars spent on providing dental care services versus administrative costs. By establishing a medical loss ratio of 85%, the bill mandates that carriers must issue refunds to policyholders if their financial performance exceeds this threshold, effectively guaranteeing consumers a better value for their dental insurance premiums.
While S2724 seeks to improve consumer protections and fairness in dental insurance, it may face criticism from insurance providers who argue that the mandated medical loss ratio could limit their operational flexibility and profitability. Opponents might express concerns that strict requirements could lead to increased premium costs for consumers or a reduction in available dental plans as some insurers might withdraw from the market altogether. The possibility of financial impairments affecting carriers due to the refund requirements is another contentious point that may arise during legislative discussions.