Alabama House Bill HB401

Alabama 2025 Regular Session

• Introduced: 3/6/25
• Refer: 3/6/25

Caption

Dental insurance; set medical loss ratio for insurers

Impact

The introduction of HB401 could significantly amend existing state laws concerning how dental insurers operate financially. By establishing a medical loss ratio, the bill would incentivize insurers to improve their claims payment processes and potentially increase the quality of dental care services provided to policyholders. Additionally, the mandatory reporting of income and expense data to the Commissioner of Insurance would create a more transparent environment, allowing for greater oversight and consumer protections within the dental insurance market.

Summary

House Bill 401 seeks to regulate the expenditures of dental insurers by mandating a minimum medical loss ratio. Specifically, the bill requires that dental insurers spend at least 85 percent of the premiums they collect on customer claims for dental services. If insurers fail to meet this threshold, they are obligated to refund the excess premiums retained back to the policyholders. This legislation aims to enhance transparency and accountability in the dental insurance sector, ensuring that enrollees receive a fair return on the premiums they pay for coverage.

Contention

Some points of contention surrounding HB401 may include concerns from dental insurers regarding the feasibility of consistently meeting the 85 percent medical loss ratio requirement, especially in times of economic downturn or when facing unexpected claims surges. Critics of the bill could argue that such regulations might lead to a decrease in services offered, as insurers could tighten eligibility criteria or increase premiums to maintain profitability. Furthermore, there may be debates regarding the implications of increased regulation on market competition and the availability of dental insurance options.