An Act amending Title 40 (Insurance) of the Pennsylvania Consolidated Statutes, providing for dental insurance medical loss ratios; and imposing penalties.

PRINTER'S NO. 1517
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1325
Session of
2025
INTRODUCED BY MULLINS, HILL-EVANS, GIRAL, SANCHEZ, VENKAT,
FREEMAN, DONAHUE AND CEPEDA-FREYTIZ, APRIL 28, 2025
REFERRED TO COMMITTEE ON INSURANCE, APRIL 28, 2025
AN ACT
Amending Title 40 (Insurance) of the Pennsylvania Consolidated
Statutes, providing for dental insurance medical loss ratios;
and imposing penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 40 of the Pennsylvania Consolidated
Statutes is amended by adding a chapter to read:
CHAPTER 52
DENTAL INSURANCE MEDICAL LOSS RATIOS
Sec.
5201. Definitions.
5202. Medical loss ratio report.
5203. Regulations.
5204. Enforcement.
§ 5201. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
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"Dental policy." A health insurance policy that provides
dental coverage, whether stand-alone or integrated with other
medical or health care coverage.
"Health insurance policy." As follows:
(1) A policy, subscriber contract, certificate or plan
issued by a health insurer that provides medical or health
care coverage.
(2) The term does not include any of the following:
(i) An accident only policy.
(ii) A credit only policy.
(iii) A long-term care policy.
(iv) A disability income policy.
(v) A specified disease policy.
(vi) A Medicare supplement policy.
(vii) A TRICARE policy, including a Civilian Health
and Medical Program of the Uniformed Services (CHAMPUS)
supplement policy.
(viii) A fixed indemnity policy.
(ix) A hospital indemnity policy.
(x) A vision only policy.
(xi) A workers' compensation policy.
(xii) An automobile medical payment policy under 75
Pa.C.S. (relating to vehicles).
(xiii) A homeowner's insurance policy.
(xiv) Any other similar policy, other than a dental
only policy, providing for limited benefits.
"Health insurer." An entity licensed by the department that
offers, issues or renews an individual or group health insurance
policy that is offered or governed under any of the following:
(1) The act of May 17, 1921 (P.L.682, No.284), known as
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The Insurance Company Law of 1921, including section 630 of
that act.
(2) The act of December 29, 1972 (P.L.1701, No.364),
known as the Health Maintenance Organization Act.
(3) Chapter 61 (relating to hospital plan corporations)
or 63 (relating to professional health services plan
corporations).
§ 5202. Medical loss ratio report.
(a) Annual report required.--No later than the April 30 of
the calendar year following the effective date of this
subsection and each April 30 thereafter, each health insurer
shall submit to the department a medical loss ratio report
regarding the dental policies of the health insurer in
accordance with this section.
(b) Contents.--Each annual medical loss ratio report must:
(1) Contain information regarding dental coverage
provided by the dental policies for the prior calendar year,
organized by market and product type.
(2) Be consistent with the terms and requirements of:
(i) 42 U.S.C. § 300gg-18 (relating to bringing down
the cost of health care coverage).
(ii) 45 CFR Pt. 158 (relating to issuer use of
premium revenue: reporting and rebate requirements).
(3) Provide the information required in the most recent
edition of the Centers for Medicare and Medicaid Services
Medical Loss Ratio Annual Reporting Form (CMS-10418).
(4) Calculate the medical loss ratio as the percentage
of premium dollars spent on patient care as calculated by
dividing the numerator by the denominator, where:
(i) The numerator, not to include overhead and
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administrative cost expenditures, is the sum of:
(A) the amount incurred for clinical dental
services provided to enrollees;
(B) the amount, not to exceed 5% of net premium
revenue, incurred on activities that improve dental
care quality; and
(C) other incurred claims as defined in 45 CFR
158.140 (relating to reimbursement for clinical
services provided to enrollees).
(ii) The denominator is the total amount of premium
revenue, excluding Federal and State taxes, licensing and
regulatory fees paid, community benefit expenditures as
defined in 45 CFR 158.162(c) (relating to reporting
Federal and State taxes) and limited by 45 CFR 158.162(b)
(1)(vii), and any other payments required by Federal law.
(5) Be adjusted as necessary to address the particulars
of dental coverage.
(6) Provide other information as the department may
specify in guidance made available on the publicly accessible
Internet website of the department.
(c) Administrative cost expenditures.--Unless otherwise
determined by the department, an administrative cost expenditure
for the purposes of calculating and reporting the medical loss
ratio includes, but is not limited to, the following:
(1) Financial administration expenses.
(2) Marketing and sales expenses.
(3) Distribution expenses.
(4) Claims operation expenses.
(5) Medical administration expenses such as disease
management, care management, utilization review and medical
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management activities.
(6) Network operation expenses.
(7) Charitable expenses.
(8) Board, bureau or associate fees.
(9) Federal and State tax expenses, including
assessments.
(10) Payroll expenses.
(d) Posting.--The department shall make each annual medical
loss ratio report, along with other information provided to the
department under this section, available to the public by
posting the report and other information on the publicly
accessible Internet website of the department.
(e) Applicability.--This section shall not apply to:
(1) The State program of medical assistance established
under the act of June 13, 1967 (P.L.31, No.21), known as the
Human Services Code.
(2) The program for Comprehensive Health Care for
Uninsured Children under Article XXIII-A of the act of May
17, 1921 (P.L.682, No.284), known as The Insurance Company
Law of 1921.
(3) Other Commonwealth-sponsored health programs.
§ 5203. Regulations.
The department may promulgate regulations as necessary and
appropriate to carry out the provisions of this chapter.
§ 5204. Enforcement.
(a) Penalties.--Upon satisfactory evidence of a violation of
this chapter by a health insurer, the Insurance Commissioner may
assess any of the following administrative penalties on the
health insurer:
(1) Suspend, revoke or refuse to renew the license of
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the health insurer.
(2) Enter a cease and desist order.
(3) Impose a civil penalty of not more than $5,000 for
each action in violation of this chapter.
(4) Impose a civil penalty of not more than $10,000 for
each action in willful violation of this chapter.
(b) Limitation.--Penalties imposed against a health insurer
under this section may not exceed $500,000 in the aggregate
during a single calendar year.
(c) Nonexclusive remedies.--
(1) The enforcement remedies imposed under this section
are in addition to any other remedies or penalties that may
be imposed under any other applicable law of this
Commonwealth, including the act of July 22, 1974 (P.L.589,
No.205), known as the Unfair Insurance Practices Act.
(2) A violation of this chapter by a health insurer
shall be deemed to be an unfair method of competition and an
unfair or deceptive act or practice under the Unfair
Insurance Practices Act.
(d) Administrative procedures.--The administrative
provisions of this section shall be subject to 2 Pa.C.S. Chs. 5
Subch. A (relating to practice and procedure of Commonwealth
agencies) and 7 Subch. A (relating to judicial review of
Commonwealth agency action).
Section 2. This act shall take effect immediately.
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