HB401 Alabama 2025 Session

Summary

Primary Sponsor

Phillip RigsbyRepresentative

Republican

Session

2025 Regular Session

Title

Dental insurance; set medical loss ratio for insurers

Summary

HB401 would require Alabama dental insurers to spend at least 85% of premiums on dental care, rebate excess premiums to enrollees if they fall short, require annual financial reporting, and empower the Insurance Commissioner to block rate increases that exceed the dental consumer price index, with a hearing process for appeals.

What This Bill Does

Sets a minimum medical loss ratio (MLR) of 85% for dental benefit plans and health plans, meaning insurers must spend at least 85% of premiums on dental care services paid to patients. If the MLR falls below 85%, insurers must rebate the excess premiums to enrollees or provide a premium credit. Requires insurers to file annual reports with the Commissioner detailing income, expenses, and other financial information, and makes that information publicly accessible. The Commissioner can disapprove proposed premium rate increases that exceed the consumer price index for dental services or are actuarially unsound or discriminatory, with a hearing process available to challenge the decision.

Who It Affects

• Dental insurers operating in Alabama: must meet an 85% MLR, rebate excess premiums if below threshold, file annual financial reports, and follow rate-review rules.
• Enrollees and policyholders (individuals and groups covered by dental benefit plans): may receive rebates if insurers under-spend on claims, and their premiums and coverage could be affected by rate decisions and public insurer data.

Key Provisions

• Establishes an 85% medical loss ratio for dental benefit plans and health benefit plans, requiring most premium dollars to be spent on dental care services.
• Requires rebates to enrollees if the MLR is below 85%, with the rebate amount calculated as the excess over 85% multiplied by total premiums.
• Requires annual reporting to the Commissioner of Insurance, including plan enrollment, gross income, MLR, aggregated claims paid, premiums, overhead expenses, net income, reserves, risk data, and other financial details; information is publicly posted.
• Specifies the calculation method for the MLR, including how claims paid, reserves, and overpayments are treated, and which premium-related items are included or excluded from the calculation.
• Gives the Commissioner authority to disapprove proposed premium rate increases that are excessive (relative to the dental CPI), actuarially unsound, or discriminatory, with a hearing process for insurers to challenge decisions.
• Effective date is October 1, 2025, and the bill makes conforming changes to certain Alabama insurance law sections.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Insurance