Keenan Briefings

Briefing

AB 1048 Brings New Dental Coverage Requirements and Reporting Obligations

Due to the passage of AB 1048 (Chapter 557, Statutes of 2023) in 2023, California dental plans will soon have to meet new coverage requirements and dental carriers will have additional information to report to state regulators.

Most importantly for employers and dental plan members, AB 1048 prohibits fully insured large group dental plans from imposing a dental waiting period or preexisting condition provision for any plan year beginning on or after January 1, 2025. Medi-Cal dental managed care contracts are exempted from this provision.

AB 1048 also requires dental carriers to report the following rate information to state regulators annually, beginning on or after January 1, 2025:

• Type of plan/insurer involved, such as for profit or not for profit;
• Product type;
• Annual rate;
• Total earned premiums in each plan contract or policy form;
• Total incurred claims in each plan contract or policy form;
• Average rate of increase;
• Effective date of rate increase;
• Number of subscribers, enrollees, or insureds affected by each plan contract or policy form;
• Any changes in administrative costs;
• Variation in trend, by geographic region, if the plan or insurer serves more than one geographic region;
• The loss ratio for the plan contract, as specified;
• Proposed and effective rates for all products;
• The base rate or rates and the factors used to determine the base rate or rates;
• Trend, including overall average, and by-product, if different;
• Any other factors affecting dental premium rates;
• An actuarial certification signed by a qualified actuary; and,
• Any other information required for the departments to make their determination.

Carriers must file the required information at least 120 days before any change in the methodology, factors, or assumptions that would affect rates.

The new law authorizes both the California Department of Managed Health Care (DMHC) and the California Department of Insurance (CDI) to determine if dental rate changes are unreasonable or not justified, and it requires the plan or insurer to provide notice of that determination to an individual, group applicant or subscriber.

These new changes in the law are well-timed, as out-of-pocket expenses for dental services are rising. These rising costs can lead employees to forego care – a recently published California Health Care Foundation survey found that 38% of Californians reported that either they or a family member have skipped dental care due to cost. Therefore, the provisions of AB 1048 should be welcome news to employers, as employees will be offered better coverage and California’s health insurance regulators will have more of a say in proposed rate increases.

Keenan is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Clients are advised to consult with their own attorney for a determination of their legal rights, responsibilities, and liabilities, including the interpretation of any statute or regulation, or its application to the clients’ business activities.