The Improving Dental Administration Act seeks to close a regulatory loophole for plans governed by the Employee Retirement Income Security Act.
US Representatives Jeff Van Drew (R-NJ) and Herb Conaway (D-NJ) have introduced the Improving Dental Administration (IDA) Act, a bill designed to make self-funded dental plans subject to state-level insurance regulations. The legislation is supported by a coalition of dental organizations, including the American Dental Association and the American Association of Orthodontists.
Addressing the ERISA Loophole
The bill targets a provision in the Employee Retirement Income Security Act of 1974 (ERISA) that governs self-funded dental plans. According to the ADA, some dental carriers use ERISA to claim exemption from more than 360 state-level dental insurance and patient protection laws enacted over the last decade.
The legislation would require that state insurance laws applying to fully insured dental plans also apply to self-funded dental coverage and their administrators. This would affect regulations concerning noncovered services, network leasing, prior authorization, prompt payment, and retroactive denials.
“The growing number of ‘self-funded’ plans regulated by ERISA has emboldened carriers to assert they are not subject to state oversight, claiming that the ERISA preemption gives them a free pass to ignore insurance laws,” says Rich Rosato, DMD, president of the American Dental Association, in a release. “We need to fix this ERISA loophole that keeps state regulators from enforcing pro-consumer insurance laws enacted in their states. Patients and providers should not be left unprotected based simply on how their dental benefits are purchased.”
Creating Uniform Protections
According to supporters, nearly half of all dental plan enrollees in the country receive coverage through self-funded plans. This has created a system where patient and provider protections can vary depending on how a dental plan is financed. The IDA Act aims to ensure these protections apply consistently across different plan types.
“Insurance regulators are uncertain about how to hold carriers accountable to laws in their state when the carriers act as administrators for self-funded plans. This legislation takes a big step forward in creating fairness and accountability across the board,” says Rosato, in a release.
In a letter to the bill’s sponsors, twelve dental organizations, including the American Association of Orthodontists, expressed their support, stating the act would help close the ERISA loophole that has created a “bifurcated system where some patients and providers are protected by state law, while many others are not.” The organizations plan to work with the representatives to advance the bill in the 119th Congress.
Photo: ID 64967871 | © Designer491 | Dreamstime.com
