Virginia General Assembly preserves competitive insurance marketplace

Before making major changes to small group health plans, agents and brokers should take note of a new Virginia law.  If you’ve sold or renewed a plan in 2014 for groups with 50 or fewer employees, you’ve likely run into a situation where the health carrier required the group to cover pediatric dental benefits as part of the health plan unless the group could attest to having an exchange-certified, stand-alone dental plan. This will no longer be necessary in 2015. 

Bills recently passed by the Virginia General Assembly, HB33 and SB484, clarify that a carrier offering plans in the small group or individual markets is allowed to offer health plans without pediatric dental benefits as long as two conditions are met: First, there has to be a qualified dental plan available to the small group or individual and, second, the carrier must disclose that the pediatric dental benefits are not included in its health plan. 

Simple.  Since carriers are offering exchange-certified dental plans both on and off of the exchanges in Virginia, beginning in 2015, groups and individuals once again will be free to shop for their medical and dental benefits the way they always have.

One of the unintended consequences of health-care reform was that employers with 50 and fewer employees and people who shopped for insurance on their own effectively were required to purchase pediatric dental coverage as part of their medical plan whether or not the purchaser had children and whether or not shoppers already had a family plan with the dentist and plan design they preferred. 

How did this strange rule come to be?  With the launch of insurance exchanges, people have access to two distinct marketplaces in which to shop for coverage.  However, there are significant differences in the rules between the on- and off-exchange markets. 

Inside the exchange, people can purchase all of the required “Essential Health Benefits,” but they can choose not to purchase the pediatric dental benefit.  The mere presence of a stand-alone dental carrier option on an exchange relieves medical carriers of the obligation to provide dental coverage for kids and relieves childless adults of the responsibility to purchase pediatric dental coverage.  This makes sense. Nearly everyone with dental coverage gets that coverage separately from their medical plan.

Outside the exchange, individuals and small employers effectively were required to purchase pediatric dental coverage as part of their larger health insurance plan. This inequitable situation led to several negative consequences, which are true for 2014, but, in Virginia, go away in 2015 and beyond thanks to the legislature.

First, in 2014, medical carriers could imbed pediatric dental coverage into their medical plans for individual and small employers and require that a large medical deductible be met before any dental benefits are paid. In such a scenario, parents would take their kids to what they thought was a covered dentist appointment only to discover that they had failed to meet their medical deductible. 

Second, medical carriers were essentially forced to sell pediatric dental coverage to adults who had no children.

Third, with children covered by a medical plan, parents might have been tempted to drop their children from the family’s current dental plan only to discover that their child’s dentist was no longer in-network.  

Fourth, based on a recent statewide survey, nearly half of Virginians (48 percent) said they would be at least somewhat likely to drop their own dental coverage if their children were covered through their medical plan.  Having fewer adults with dental coverage was certainly not the intention of health-care reform. 

It appears clear that the unintended consequences of health-care reform will not be fixed in Washington, DC.  Thankfully, in this one area, states are in a position to make a difference, and the Virginia General Assembly had the foresight to do just that. 

2014

Health plans sold to groups with fewer than 50 employees and to individuals must include pediatric dental benefits in the health plan UNLESS the carrier is “reasonably assured” that the applicant already has enrolled in an exchange-certified dental plan.

• Regardless of whether the applicant has children
• Regardless of whether the applicant’s children already are covered by another dental plan that is not “exchange- certified.”
• The dental benefits may be subject to the medical deductible.

2015 and beyond

Health plans sold to groups with fewer than 50 employees and to individuals do NOT have to include pediatric dental benefits so long as:

1. There is an exchange-certified dental plan available to the applicant, and
2. The health plan discloses that pediatric dental benefits are not included in the plan.

Chris Pyle is vice president, marketing and government relations at Delta Dental of Virginia.