Dental insurers would meet care spending minimums or pay rebates

Dental insurers would meet minimum shares of premiums spent on care and allowed quality improvements or pay rebates. Minimums would be 85% for large group plans and 83% for individual and small group plans. These rules cover stand-alone dental plans, excluding Medicaid and NJ FamilyCare. The calculation would exclude administrative spending and subtract taxes, regulatory fees, and federally required payments from premium income. Insurer activities intended to improve care quality could count for no more than 5% of net premium income. An insurer reporting a spending share above 85% would need the insurance commissioner’s approval to go below 85% in later years. Rebates would equal the spending shortfall applied to adjusted premium income. Insurers would submit a correction plan within 90 days after receiving notice that they fell short. Minimums would start January 1 after the first completed annual reporting period, although insurers must show compliance in their first report. Rebates would be due September 30 of the following calendar year.

Dental insurers would file annual spending reports with the New Jersey Commissioner of Banking and Insurance, who would make the information public. Reporting would cover stand-alone dental plans offered in New Jersey, excluding Medicaid and NJ FamilyCare. Reports would separate markets and plan types and include enrollment, members’ costs, and annual coverage limits. Insurers would provide requested verification information within 30 days of notice. The commissioner would publish searchable comparisons by plan type and send an annual report to the Legislature. Reports would cover each fiscal year of coverage, with data public by January 1 of the year after receipt. These rules would apply to policies delivered, issued, executed, or renewed on or after the first day of the third month following enactment.

The New Jersey insurance commissioner would investigate unusually low care spending and require additional rebates. Comparisons would use three years of data within each insurance market. Extra rebates would return premiums above the amount needed to reach the market’s average care spending share. Investigation would apply when spending falls below the market average by more than one standard deviation, a measure of how spread out insurers’ results are. Public labels for unusually high or low spending would exclude insurers within three percentage points of the average. The commissioner could allow a larger margin in unique circumstances. Insurers still labeled unusual after two consecutive years without improvement would face extra reporting and submit a compliance plan, unless the commissioner finds reasonable unique circumstances. Extra rebates would be due September 30 of the fiscal year following the calculation year. Extra reporting would apply in the reporting period after two consecutive years without improvement.