Committee hears bill to require 83% medical-loss ratio for dental plans

The House Industry, Business and Labor Committee heard testimony on House Bill 1481 at a committee hearing regarding a proposed requirement that dental insurers spend at least 83% of premium dollars on dental benefits, proponents and opponents said.

Sponsor Representative Jim Casper, R-District 46, introduced the bill and said the measure is intended to increase transparency in dental insurance and help employers and employees evaluate plan value. "This bill deals with dental insurance and what's called the medical loss ratio," Casper said, adding an amended draft was being offered to the committee.

The bill's lead supporter, William Sherwin, executive director of the North Dakota Dental Association, told the committee the proposal is aimed at aligning insurer incentives with patient care. "We feel it is fair and equitable that of your premiums, you can have 17% for your overhead, for your administrative costs, and your profits, but the remainder needs to be spent on dental care," Sherwin said. Sherwin and other supporters argued the dental market is a limited-benefit product distinct from major medical and cited long-unchanged annual maximums — "a thousand or 1,500" dollars, Sherwin said — that have not kept pace with costs since 1983.

Opponents including Alex Young, legislative director for the American Council of Life Insurers (ACLI), and witnesses for Delta Dental and other carriers warned of potential market disruption. Young said the 83% threshold is modeled on major-medical MLR rules but argued dental premiums are much lower in absolute dollars. He said a recent Massachusetts implementation saw carriers exit the small-group and individual markets and warned the North Dakota proposal could reduce plan options and raise premiums. "The minimum loss ratio requirements in House Bill 1481 would simply result in reduced dental options for consumers and higher premiums," Young testified.

Delta Dental’s Ben Wagsland told the committee the North Dakota Insurance Department already reviews dental filings and that dental plans have materially different cost structures than medical plans; he noted fixed administrative costs are a larger share of lower dental premiums and urged caution before imposing an ACA-style standard. Wagsland cited actuarial analyses done elsewhere that predicted major premium increases in some markets if an ACA-style MLR were imposed.

Crystal Bartusco of the North Dakota Insurance Department testified the department is neutral on the bill and explained the state's prior-approval process for rate and form filings. Bartusco said the department typically sees dental loss ratios in the 50–65% range in filings and noted the department's actuary evaluates filing reasonableness case-by-case.

Committee members asked multiple witnesses for additional data, including the department's current loss-ratio filings, the average premiums in North Dakota, and whether brokers and employers should be given claims-experience disclosures. Representative Casper and several committee members signaled interest in amendments to add clearer transparency or reporting requirements; no committee vote on HB 1481 was recorded at the hearing.

Why it matters: Supporters say the bill would increase value and transparency for consumers and employers who purchase dental coverage; opponents say an 83% threshold would be the wrong template for a low-premium, limited-benefit market and could lead carriers to exit or raise prices, reducing access. The Insurance Department indicated it could provide claims- and rate-level data to the committee if requested.

Next steps: Committee members asked staff and the Insurance Department to provide data on current loss ratios and average premiums and discussed potential amendments. No formal action or vote was taken at the hearing.