On September 25, Gov. Jerry Brown (D-CA) signed
1962 into law. AB 1962, authored by Assembly Member Nancy Skinner (D-CA),
establishes standardized requirements for dental plans to disclose how they
spend patient premium dollars and puts the state on a path to establish a
minimum percentage of premium dollars that must be spent on patient care.
Under current state law and the federal
Affordable Care Act, all medical plans must spend at least 80% of patient
premiums directly on patient care as opposed to insurance company profits and
overhead, a standard known as a medical loss ratio (MLR). However, no minimum
standard exists for dental plans.
“AB 1962 lets consumers know how their premiums for
dental insurance are spent,” said Assembly Member Skinner. “With health care
costs continuing to rise, consumers deserve all the information they can get.”
According to the California
Dental Association, 15 million Californians are enrolled in private dental
Under the new law, all California dental plans
will have to report the necessary financial data to the state Department of
Managed Health Care and Department of Insurance by September 30, 2015, and by
September 30 of each subsequent year.
In addition, the new law declares the intent of the Legislature
that the data reported be considered by the Legislature in adopting a MLR standard
for health care service plans and specialized health insurance policies that cover dental services that would
take effect no later than January 1, 2018.