HB 1325 — 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
 1   Amending Title 40 (Insurance) of the Pennsylvania Consolidated
 2      Statutes, providing for dental insurance medical loss ratios;
 3      and imposing penalties.
 4      The General Assembly of the Commonwealth of Pennsylvania
 5   hereby enacts as follows:
 6      Section 1.    Title 40 of the Pennsylvania Consolidated
 7   Statutes is amended by adding a chapter to read:
 8                                 CHAPTER 52
 9                    DENTAL INSURANCE MEDICAL LOSS RATIOS
10   Sec.
11   5201.   Definitions.
12   5202.   Medical loss ratio report.
13   5203.   Regulations.
14   5204.   Enforcement.
15   § 5201.   Definitions.
16      The following words and phrases when used in this chapter
17   shall have the meanings given to them in this section unless the
18   context clearly indicates otherwise:
 1      "Dental policy."     A health insurance policy that provides
 2   dental coverage, whether stand-alone or integrated with other
 3   medical or health care coverage.
 4      "Health insurance policy."     As follows:
 5          (1)   A policy, subscriber contract, certificate or plan
 6      issued by a health insurer that provides medical or health
 7      care coverage.
 8          (2)   The term does not include any of the following:
 9                (i)    An accident only policy.
10                (ii)    A credit only policy.
11                (iii)    A long-term care policy.
12                (iv)    A disability income policy.
13                (v)    A specified disease policy.
14                (vi)    A Medicare supplement policy.
15                (vii)    A TRICARE policy, including a Civilian Health
16          and Medical Program of the Uniformed Services (CHAMPUS)
17          supplement policy.
18                (viii)    A fixed indemnity policy.
19                (ix)    A hospital indemnity policy.
20                (x)    A vision only policy.
21                (xi)    A workers' compensation policy.
22                (xii)    An automobile medical payment policy under 75
23          Pa.C.S. (relating to vehicles).
24                (xiii)    A homeowner's insurance policy.
25                (xiv)    Any other similar policy, other than a dental
26          only policy, providing for limited benefits.
27      "Health insurer."     An entity licensed by the department that
28   offers, issues or renews an individual or group health insurance
29   policy that is offered or governed under any of the following:
30          (1)   The act of May 17, 1921 (P.L.682, No.284), known as

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 1      The Insurance Company Law of 1921, including section 630 of
 2      that act.
 3             (2)   The act of December 29, 1972 (P.L.1701, No.364),
 4      known as the Health Maintenance Organization Act.
 5             (3)   Chapter 61 (relating to hospital plan corporations)
 6      or 63 (relating to professional health services plan
 7      corporations).
 8   § 5202.    Medical loss ratio report.
 9      (a)    Annual report required.--No later than the April 30 of
10   the calendar year following the effective date of this
11   subsection and each April 30 thereafter, each health insurer
12   shall submit to the department a medical loss ratio report
13   regarding the dental policies of the health insurer in
14   accordance with this section.
15      (b)    Contents.--Each annual medical loss ratio report must:
16             (1)   Contain information regarding dental coverage
17      provided by the dental policies for the prior calendar year,
18      organized by market and product type.
19             (2)   Be consistent with the terms and requirements of:
20                   (i)    42 U.S.C. § 300gg-18 (relating to bringing down
21             the cost of health care coverage).
22                   (ii)    45 CFR Pt. 158 (relating to issuer use of
23             premium revenue: reporting and rebate requirements).
24             (3)   Provide the information required in the most recent
25      edition of the Centers for Medicare and Medicaid Services
26      Medical Loss Ratio Annual Reporting Form (CMS-10418).
27             (4)   Calculate the medical loss ratio as the percentage
28      of premium dollars spent on patient care as calculated by
29      dividing the numerator by the denominator, where:
30                   (i)    The numerator, not to include overhead and

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 1            administrative cost expenditures, is the sum of:
 2                         (A)   the amount incurred for clinical dental
 3                  services provided to enrollees;
 4                         (B)   the amount, not to exceed 5% of net premium
 5                  revenue, incurred on activities that improve dental
 6                  care quality; and
 7                         (C)   other incurred claims as defined in 45 CFR
 8                  158.140 (relating to reimbursement for clinical
 9                  services provided to enrollees).
10                  (ii)    The denominator is the total amount of premium
11            revenue, excluding Federal and State taxes, licensing and
12            regulatory fees paid, community benefit expenditures as
13            defined in 45 CFR 158.162(c) (relating to reporting
14            Federal and State taxes) and limited by 45 CFR 158.162(b)
15            (1)(vii), and any other payments required by Federal law.
16            (5)   Be adjusted as necessary to address the particulars
17      of dental coverage.
18            (6)   Provide other information as the department may
19      specify in guidance made available on the publicly accessible
20      Internet website of the department.
21      (c)   Administrative cost expenditures.--Unless otherwise
22   determined by the department, an administrative cost expenditure
23   for the purposes of calculating and reporting the medical loss
24   ratio includes, but is not limited to, the following:
25            (1)   Financial administration expenses.
26            (2)   Marketing and sales expenses.
27            (3)   Distribution expenses.
28            (4)   Claims operation expenses.
29            (5)   Medical administration expenses such as disease
30      management, care management, utilization review and medical

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 1      management activities.
 2             (6)    Network operation expenses.
 3             (7)    Charitable expenses.
 4             (8)    Board, bureau or associate fees.
 5             (9)    Federal and State tax expenses, including
 6      assessments.
 7             (10)    Payroll expenses.
 8      (d)    Posting.--The department shall make each annual medical
 9   loss ratio report, along with other information provided to the
10   department under this section, available to the public by
11   posting the report and other information on the publicly
12   accessible Internet website of the department.
13      (e)    Applicability.--This section shall not apply to:
14             (1)    The State program of medical assistance established
15      under the act of June 13, 1967 (P.L.31, No.21), known as the
16      Human Services Code.
17             (2)    The program for Comprehensive Health Care for
18      Uninsured Children under Article XXIII-A of the act of May
19      17, 1921 (P.L.682, No.284), known as The Insurance Company
20      Law of 1921.
21             (3)    Other Commonwealth-sponsored health programs.
22   § 5203.    Regulations.
23      The department may promulgate regulations as necessary and
24   appropriate to carry out the provisions of this chapter.
25   § 5204.    Enforcement.
26      (a)    Penalties.--Upon satisfactory evidence of a violation of
27   this chapter by a health insurer, the Insurance Commissioner may
28   assess any of the following administrative penalties on the
29   health insurer:
30             (1)    Suspend, revoke or refuse to renew the license of

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 1      the health insurer.
 2            (2)   Enter a cease and desist order.
 3            (3)   Impose a civil penalty of not more than $5,000 for
 4      each action in violation of this chapter.
 5            (4)   Impose a civil penalty of not more than $10,000 for
 6      each action in willful violation of this chapter.
 7      (b)   Limitation.--Penalties imposed against a health insurer
 8   under this section may not exceed $500,000 in the aggregate
 9   during a single calendar year.
10      (c)   Nonexclusive remedies.--
11            (1)   The enforcement remedies imposed under this section
12      are in addition to any other remedies or penalties that may
13      be imposed under any other applicable law of this
14      Commonwealth, including the act of July 22, 1974 (P.L.589,
15      No.205), known as the Unfair Insurance Practices Act.
16            (2)   A violation of this chapter by a health insurer
17      shall be deemed to be an unfair method of competition and an
18      unfair or deceptive act or practice under the Unfair
19      Insurance Practices Act.
20      (d)   Administrative procedures.--The administrative
21   provisions of this section shall be subject to 2 Pa.C.S. Chs. 5
22   Subch. A (relating to practice and procedure of Commonwealth
23   agencies) and 7 Subch. A (relating to judicial review of
24   Commonwealth agency action).
25      Section 2.    This act shall take effect immediately.




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