Key Facts About California’s New Dental Rate Filing Rules
- Written By Alexander Brill
Since California’s Assembly Bill 1048 took effect on January 1, 2025, insurance companies and managed care organizations doing business in the state have had to update their processes for dental rate filings. Now, more than one year later, insurance companies are settling into a new normal for rate filings, one that places greater attention on rate adequacy and supporting documentation.
Before these changes, reporting requirements were less standardized, which made comparisons of medical loss ratios and rate adequacy more difficult. Now, insurance companies doing business in California are required to file annually, thereby standardizing data for comparison, and creating a framework for market oversight. Insurers regulated by either the California Department of Insurance or the California Department of Managed Health Care must comply with the new rules.
Here is a helpful overview of the updated requirements and what insurers should keep in mind when preparing filings.
What has changed?
AB1048 outlined various requirements for dental rate filings in California. Here are the key aspects of the changes:
- Annual rate filings are required – Insurers must submit dental rate filings every year to the CDI or DMHC, regardless of whether new rates are proposed.
- Separate dental rate filings required for each market –Insurance companies must submit a separate rate filing for each market (individual, small group, and large group).
- Independent actuarial certification is mandatory – Certification by qualified third-party actuaries is required. This task can no longer be performed by in-house actuarial teams.
- Enhanced review of rate adequacy – The bill established no official minimum loss ratio, so insurers will need to be ready to submit justification for all loss ratios.
What do these new California dental rate filing changes mean for insurers?
These new rules establish annual reporting and certification requirements for dental insurers in California. Here are some important steps to incorporate into your annual rate filing process:
Complete the Dental Rate Review Workbook annually
Companies are now required to submit California’s Dental Rate Review Workbook (AB 1048 Dental Workbook) as part of their filing. It’s a comprehensive spreadsheet that includes pricing details for various products, data on cost and utilization trends, rating factors and supporting methodology, and more.
Partner with experienced actuaries
Third-party independent actuarial certification requirements mean that dental insurance companies operating in the state of California must work with independent actuaries for certification. Actuarial consulting partners can assist with accurate rate development or the calculation of proposed rates. Look for actuaries who have already filed dental rates in California on behalf of clients and who have experience completing the Dental Rate Review Workbook.
Leverage data collection for insights
One ancillary benefit of these changes is that insurance companies can now use the resulting data for internal business insights that can support profitability goals and marketing plans. Company leadership can share goals with their actuarial services partners, who can concurrently review collected data with the company’s internal objectives in mind.
Remember to submit a separate annual filing for all plans
Dental insurance is now coming into alignment with health plans, which are required to submit a separate rate filing for each market (individual, small group, and large group). If a company offers individual, small group, and large group plans, the company must submit an annual filing for each. An experienced actuarial support services partner can help lighten the load.
Rate filings are required for rate increases
Dental insurers may request a rate increase when submitting their annual filing. However, if an insurer submits an annual filing without requesting a rate increase, and then wants to increase rates later in the year, they must submit an additional rate filing (with the same requirements as an annual filing) no later than 120 days before implementing the change.
California’s updated dental rate filing requirements reflect the state’s focus on transparency and give regulators oversight over dental premiums. Keeping these requirements in mind while developing rates can help companies manage filings more efficiently and help support timely, complete, and well-documented filings. To meet these new standards, dental insurers will need reliable partners for the independent actuarial certification and review process.
Contact Perr&Knight today to discover how our team of experienced actuaries can help you navigate the changes related to AB 1048.
