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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 1694 By: McEntire
COMMITTEE SUBSTITUTE
An Act relating to dental insurance; providing
definition; providing how a medic al loss ratio is
calculated; requiring certain hea lth care service
plans to file a medical loss ratio report; providing
exemptions; verifying medical loss ratio annual
report; requiring certain health care service plans
to provide annual rebates ; requiring the Oklahoma
Insurance Department to regulate rates; authorizing
the Attorney General to intervene ; providing for
codification; and providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 7350 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. As used in this act, "medical loss ratio (MLR) " means the
minimum percentage of all premium funds collected by an insurer e ach
year that must be spent on actual patient care rather than overhead
costs. The minimum required percentage that dental insurance plans
must meet for the portion of patient premiums must be dedicated to
patient care rather than administrative and overh ead costs or the
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difference must be refunded to individuals and groups in the form of
a rebate.
Medical loss ratio for a dental plan or dental coverage of a
health benefit plan shall be determined by dividing th e numerator by
the denominator as defined below:
1. The numerator shall be the amount spent on care. The amount
spent on care shall include:
a. the amount expended for clinical dental se rvices which
are services within the code on dental procedures and
nomenclature, provided to enrollees which includes
payments under capitation contracts with dental
providers, whose services are covered by the contr act
for dental clinical services or supp lies covered by
the contract,
b. unpaid claim reserves means reserves and liabilities
established to account for claims that were incurred
during the MLR reporting year but were not paid within
three (3) months of the end of the MLR reporting year,
c. any overpayment that has already been received from
providers should not be reported as a paid claim.
Overpayment recoveries re ceived from providers must be
deducted from incurred claims amounts , and
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d. any claim payment recovered by insurers fro m providers
or enrollees using utilization management efforts, but
be deducted from incurred claims amounts.
2. The calculation of the numerator does not include:
a. all administrative costs including , but not limited
to, infrastructure, personnel costs, or broker
payments,
b. amounts paid to third-party vendors for secondary
network savings,
c. amounts paid to third-party vendors for network
development, administrative fees, claims processing,
and utilization management, or
d. amounts paid to a providers for professional or
administrative services that do not represent
compensation or reimbursement for covered services
provided to an enrollee, including, but not limited
to, dental record copying costs, atto rney fees,
subrogation vendor fees, compensation t o
paraprofessionals, janitors, quality assurance
analysts, administrative supervi sors, secretaries to
dental personnel, and dental record clerks.
3. The denominator is calculated using insurer reven ue.
a. earned premium means all monies paid by a policyho lder
or subscriber as a condition of receiving coverage
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from the issuer, includin g any fees or other
contributions associated wit h the dental plan, and
b. the denominator is the to tal amount of the earned
premium revenues, excluding federal and state taxes
and licensing and regulatory fees paid after
accounting for any payments pursuan t to federal law.
B. A dental benefit plan or the dental por tion of a health
benefit plan that issues, sells, renews, or offers a specialized
health benefit plan contract covering dental services shall file a
medical loss ratio (MLR) with the Oklahoma Insurance Department that
is organized by market and product typ e and, where appropriate,
contains the same informat ion required in the 2013 federal Medical
Loss Ratio Annual Reporting Form (CMS-10418).
C. The MLR reporting year shall be for the calendar year during
which dental coverage is provided by the plan. All terms used in
the MLR annual report shall have the s ame meaning as used in the
federal Public Health Service Act , 42 U.S.C., Section 300gg-18, Part
158 of Title 45 of the Code of Federal Regulations.
D. If data verification of the dental benefit plan or the
dental portion of a health benefit plan's representations in the MLR
annual report is deemed necessary, the Department shall provide the
health benefit plan with a notification thirty (30) days before the
commencement of the financial examination.
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E. The dental benefit plan or the dental portion of a health
benefit plan shall have thirty (30) days from the date of
notification to submit to the Department all requested data. The
Insurance Commissioner may extend the time for a health benefit plan
to comply with this sub section upon a finding of good cause.
F. The Department shall make available to the public all of the
data provided to the Department pursuant to this section.
G. Exempt from this act are health benefit plans for health
care services under Medicaid, the Children's Health Insurance
Program, or other state-sponsored health programs.
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Stat utes as Section 7351 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. A dental benefit plan or the dental portion of a health
benefit plan that issues, sells, renews, or offers a specialized
health care service plan contract covering dental services shall
provide an annual rebate to each enrollee under that cov erage, on a
pro rata basis, if t he ratio of the amount of premium revenue
expended by the dental benefit plan or the dental portion of a
health benefit plan on the costs for reimbursement for services
provided to enrollees under that coverage and for activities that
improve dental care quality to the total amount of premium revenue,
excluding federal and state taxes and licensing or regulatory fees,
and after accounting for payments or receipts for risk adjustment,
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risk corridors, and reinsurance, as reported in subsection B of
Section 1 of this act, is less than, at minimum, eighty percent
(80%).
B. The total amount of an annual rebate required under this
section shall be calculated in an amount equal to the product of the
amount by which the percentage described in subsection A of this
section exceeds the insurer's reported ratio described in subsection
B of Section 1 of this act multiplied by the total amoun t of premium
revenue, excluding federal and state taxes and licensing or
regulatory fees and after accounting for payments or receipts for
risk adjustment, risk corridors, and r einsurance.
C. A dental benefit plan or the dental portion of a health
benefit plan shall provide any rebate owing to an enrollee no later
than August 1 of the calendar year following the year for which the
ratio described in sub section A of this section was calculated.
SECTION 3. NEW LAW A new section of la w to be codified
in the Oklahoma Statutes as Secti on 7352 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. All carriers offering dental benefit plans 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 Oklahoma Insurance Depart ment shall
disapprove any proposed changes t o base rates that are excessive,
inadequate, or unreasonable in relation to the benefits charged.
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The Department shall disapprove any change to group rating factors
that is discriminatory or not actuarially sound.
B. The carrier's rate shall be presumptively disapproved by the
Department if:
1. A carrier files a base rate change a nd 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 for All Urban
Consumers, U.S. city average, not seasonally adjusted;
2. A carrier's reported contribution to surplus exceeds one and
nine-tenths percent (1.9%); or
3. The aggregate medical loss ratio fo r all plans offered by a
carrier is less than the applicable percentage set forth in
subsection A of Section 2 of this act.
C. If a proposed rate change has been presumptively
disapproved:
1. A carrier shall communicate to all employers and individuals
covered under a group product that the proposed increase has been
presumptively disapproved and is subje ct to a hearing by the
Department;
2. The Department shall conduct a public hearing and shall
properly advertise the hearing in compliance with public h earing
requirements; and
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3. The Attorney General may intervene in a public hearing or
other proceeding under this section and may require addition al
information as the Attorney General considers necessa ry to ensure
compliance with this subsection.
D. If the Department disapproves the rate submitted by a
carrier, the Department shall notify the carrier in writing no later
than forty-five (45) days prior to the proposed effective date of
the carrier's rate. The carrier may submit a request for hearing to
the Department within ten (10) days of such notice of disapproval.
The Department must schedule a hearing within fifteen (15) days upon
receipt of the request for hearing. The Department shall issue a
written decision within thirty (30) days after the conclusion of the
hearing. The carrier may not implement the disapproved rates or
changes at any time unl ess the Department reverses the disapproval
after a hearing or unless a c ourt vacates the Department's decision.
SECTION 4. This act shall become effec tive November 1, 2023.
59-1-7840 MJ 03/01/23