Legislation introduced to apply state dental insurance laws to self-funded plans 

ADA calls bill ‘big step forward’ 

The ADA is supporting newly introduced federal legislation aimed at ensuring that state dental insurance reform laws apply to self-funded dental plans. 

The Improving Dental Administration Act was introduced March 12 by Reps. Jeff Van Drew, D.M.D., R-N.J., and Herb Conaway, M.D., D-N.J. The measure would ensure that the more than 360 state dental insurance reform and patient protection laws enacted in the past decade apply to patients enrolled in self-insured plans. 

Self-funded dental plans are regulated under the federal Employee Retirement Income Security Act of 1974, or ERISA. Some dental carriers have argued that the law allows them to avoid complying with state insurance regulations designed to protect patients and providers, and the ADA said it wants to close the loophole and return the power to regulate health care to the states.  

“The growing number of ‘self-funded’ plans regulated by ERISA has emboldened carriers to assert they are not subject to state oversight, claiming that the ERISA preemption gives them a free pass to ignore insurance laws,” said ADA President Richard Rosato, D.M.D. “We need to fix this ERISA loophole that keeps state regulators from enforcing pro-consumer insurance laws enacted in their states. Patients and providers should not be left unprotected based simply on how their dental benefits are purchased.” 

The ADA highlighted that the legislation is intended to address ambiguity surrounding ERISA and reaffirm states’ authority to regulate insurance coverage offered within their markets. If enacted, the bill would clarify that self-funded dental plans must comply with applicable state dental insurance laws. 

Dr. Van Drew said that as a dentist, he saw firsthand how confusing and frustrating dental insurance can be for both families and the dentists trying to treat them.  

“The problem is simple: some insurance companies use a loophole in federal law to avoid the same state rules everyone else follows,” he said. “That means patients and providers are not always treated fairly. This bill closes that loophole and makes sure the system protects patients and the dentists caring for them, not just the insurance companies.” 

Dr. Rosato said state insurance regulators often face uncertainty when attempting to hold carriers accountable to state laws when those carriers administer self-funded plans, noting that the legislation takes a “big step forward” in creating fairness and accountability.  

According to the ADA, the continued growth of self-funded plans, compared with fully insured plans, has contributed to confusion about which laws carriers must follow. Dr. Rosato said ERISA was originally intended to protect retirement plan assets, including 401(k), 403(b) and pension plans. 

“It wasn’t meant to let carriers ignore state laws and weaken consumer protections,” he said. “We want carriers to follow the law and stop claiming ERISA as a reason to ignore the insurance reform efforts within our states.” 

Additionally, the ADA led a letter of thanks from the Organized Dentistry Coalition to Drs. Van Drew and Conaway for introducing the legislation. They said the bill is “an important and timely response to the growing disconnect between state insurance protections and the realities of today’s dental coverage market.” 

“We greatly appreciate your leadership in addressing longstanding inequities in the administration of dental benefits that negatively affect patients and dentists across the country.  

The ADA said the proposed legislative change would not affect employer-sponsored retirement benefits regulated under ERISA. For more information, visit ADA.org/ERISA.