In a victory for California dentists and their patients that builds on CDA’s multi-year advocacy to reform dental benefit plans, Gov. Gavin Newsom last week signed CDA-sponsored legislation that will help dental offices communicate the details of dental plan coverage to their patients. The law will provide greater clarity by requiring dental plans to clearly disclose, at the time of determining coverage, whether a patient’s plan is state or federally regulated.
Assemblymember Jim Wood (D-Healdsburg), DDS, authored the bill, AB 952, which will take effect in January 2025 so that dental plans can fully implement the required changes to comply with the new law.
40% of Californians are enrolled in federally regulated plans: What this means for dentists
Most dental benefit plans are “fully insured” and regulated at the state level by the California Department of Managed Health Care or the California Department of Insurance.
Fully insured plans must comply with all California’s rules and regulations; however, many employers offer “self-insured” plans. These plans are regulated at the federal level according to the Employee Retirement Income Security Act of 1974, known as ERISA, and are exempt from state rules and regulations. Employer plans that are more likely to be ERISA are those covering unions, municipalities, school districts, multi-state employers and large employer groups.
As CDA first reported when announcing the bill in February, an estimated 40% of Californians are enrolled in federally regulated self-insured plans. The differences between California-regulated and federally regulated plans can be extensive, and because ERISA plans are not required to comply with California’s laws, the billing process can be difficult and frustrating for patients and providers alike.
The new law addresses a common concern CDA hears from members who report not having clarity on the type of plan they are dealing with until after the billing process has been completed — when the plan has denied coverage or cited a billing exemption for services already rendered.
The new law helps to resolve this concern by requiring dental benefit plans to disclose in multiple ways whether a plan is state or federally regulated.
State or federally regulated? New law removes the difficulty from ERISA billing process
The federal ERISA law can cause a variety of complications when it comes to regulating employee benefits. While it cannot be amended at the state level, the state can put measures in place to reduce the resulting confusion and increase plan transparency, which is what the new state law accomplishes.
Beginning Jan. 1, 2025, dental benefit plans must disclose, at the time of determining coverage, whether a patient’s plan is regulated by the state — either DMHC or CDI. They must:
- Disclose through their online patient portal whether the patient’s plan is state regulated.
- Disclose upon the dental office’s request whether the patient’s plan is state regulated. This requirement is especially relevant for plans that do not have a patient portal.
- Include the phrase “state regulated” on the patient’s electronic or physical insurance identification card — or both, if they exist.
The improved disclosure will also be particularly helpful when a conflict occurs with a plan, making it easier for patients and dentists to identify which regulatory entity to contact .
“It is vital for patients and providers to be aware of which laws apply to a patient’s dental plan,” said Asm. Wood in February. “What we have now instead is a profound lack of clarity about the standards the plans must meet and where patients and dentists can go to resolve a conflict with a plan. The ERISA notification will provide that clarity for the millions of Californians enrolled in these plans and will help alleviate confounding billing processes for dental offices too.”
With dental plans soon required to disclose through their patient portal whether the patient’s plan is state regulated, CDA especially encourages dentists to sign up to use portals offered by plans.
Dental offices will find that many plans’ portals provide access to patients’ eligibility, benefits, treatment history, frequencies, remaining maximums and deductibles in addition to the regulatory disclosure starting in 2025. Many plans also have features to transmit claims and predeterminations free of charge, and the direct connection to the plan’s processing system makes payment and processing very fast in most cases. Some portals allow offices to enroll in electronic funds transfer.
Until AB 952 goes into effect in 2025, dentists can sign up for an account at no cost at freeerisa.com to check if a patient’s dental plan is ERISA.
Members with questions about dental plan portals and how to use them can always contact CDA’s dental benefits analyst by phone or email.
Second CDA-sponsored dental-reform bill progresses through Legislature
The signing of AB 952 follows other successful pieces of legislation CDA has sponsored in recent years to improve dental plans and provide more transparency about their eroding value.
Meanwhile, CDA-sponsored AB 1048 (Wicks, D-Oakland) continues to progress through the Legislature and will be voted on in the Senate Appropriations Committee by Aug. 31. The bill seeks to strengthen regulatory oversight of dental plans and eliminate loopholes that increase out-of-pocket costs and deny patient coverage. CDA will inform members on the bill’s progress and share periodic reminders about the success of AB 952 up to its full implementation in January 2025.