FOR AN ACT relating to dental services; to amend sections 44-3802 and 44-3805, Reissue Revised Statutes of Nebraska; to prevent prepaid dental service plans from limiting fees for certain services; and to repeal the original sections.
Be it enacted by the people of the State of Nebraska, Section 1. Section 44-3802, Reissue Revised Statutes of Nebraska, is amended to read:
44-3802 As used in sections 44-3801to 44-3826, unless the context otherwise requires:
- Director shall mean the Director of Insurance;
- Department shall mean the Department of Insurance;
- Prepaid dental service plan or plan shall mean a contractual arrangement to provide specified dental services, in consideration of a specified payment for an interval of time, regardless of whether the payment for such services is made by the beneficiaries individually or by a third person for them, in such a manner that the total cost of such services is to be spread directly or indirectly among a group of persons. A prepaid dental service plan includes arrangements that create reasonable expectations of enforceable rights, but does not include the provision of, or reimbursement for, dental services incidental to other insurance coverages; and
- Prepaid dental service corporation shall mean a corporation organized under sections 44-3801 to 44-3826 and offering a prepaid dental service plan in this state.
Sec. 2. Section 44-3805, Reissue Revised Statutes of Nebraska, is amended to read:
44-3805 (1) A prepaid dental service plan may be offered on an individual or group basis. Each person covered under a group contract shall be issued a certificate of coverage.
(2) No contract or certificate for dental service may be issued in this state unless a copy of the form has been filed with and approved by the director.
(3) No prepaid dental service plan offered in this state shall limit any fees charged for services that are not covered by the plan.
Sec. 3. Original sections 44-3802 and 44-3805, Reissue Revised Statutes of Nebraska, are repealed.
NOTICE - Interpretation of “Covered Service” in New Laws About Dental Plans
December 08, 2014
To: All Interested Parties
Recently enacted Neb. Rev. Stat. § 44-3805(3) (2010) and § 44-7,105 (2012) prevent prepaid dental service plans, insurance policies, self-funded employee benefit plans, and prepaid limited health organization plans from dictating the price of dental services that they do not cover. Sections 44-3805 and 44- 7,105 do not provide a definition of the term “covered service.” Insurance and dental professionals implementing § 44-3805 and § 44-7,105 have discovered that “covered service” is subject to two interpretations.
- “Covered service” could be defined as any service for which the insurer or plan actually covered (paid) part of the dental provider’s bill, with “noncovered service” defined as any service for which the insurer pays no money to the dental provider.
- “Covered service” could also be defined as any service covered in the contract, with “noncovered service” defined as any service for which the contract does not provide payment under any circumstances.
For example: Jane’s dental policy provides maximum benefits of $1,000 per year. Jane already received the $1,000 in benefits this year, so she will pay out of pocket for any additional dental services. Jane goes to her dentist to have a tooth repaired. Fillings are covered under Jane’s policy, but because Jane has exceeded her annual maximum, she will pay the entire bill. Under definition (1), the filling is not “covered” because the insurer is not paying the bill, so Jane’s insurer cannot dictate the fee Jane’s dentist charges for the filling. Under definition (2), the filling is “covered” because the insurance policy pays for fillings when the patient has not exceeded annual benefit limits, so Jane’s insurer can require the dentist to charge only the contracted rate for the filling.
The Department allows dental plans to use either definition of “covered service” in provider contracts. This approach is based on testimony describing “covered services” in the legislative history for LB813 (codified at § 44-3805(3)) and LB810 (codified at § 44-7,105).
The Department will continue to interpret § 44-3805(3) and § 44-7,105 to allow either definition of “covered services” until a definition is supplied by the Legislature or the courts.
If you have any questions about this Notice, please contact Laura Arp at (402) 471-4635.
