TRENTON – Legislation sponsored by Senator Byron M. Baer which gives the State Department of Banking and Insurance (DOBI) jurisdiction over dental plan organizations (DPOs) in order to better regulate the industry and create accountability and financial stability, becomes law today.
“The law will create a fairness in dental insurance by making insurers accountable for the contracts and services that DPOs provide,”said Senator Baer, Chairman of the Senate Commerce Committee. “By allowing DOBI to oversee DPOs, we are ensuring that the dental plans are taking the proper safeguards to remain financially sound.”
The law, S-1752, requires DPOs to maintain detailed records for seven years. In order to account for future changes in the industry, the law raises the premium cap from $1 million to $2 million.
“The law will not over-regulate DPOs because a review will only be conducted if deemed necessary, unlike HMOs that are scrutinized every three years,” said Senator Baer. “Any examination would solely be based on the financial position of the company, and so far no DPOs has ever given the State a reason to worry about their financial status.”
According to Senator Baer, there are over 668,000 people enrolled in DPOs and 2.1 million enrollees in HMOs that provide dental benefits in New Jersey.