California Bans Certain Restrictions for Insured Dental Plans

California has enacted a state insurance law that prohibits fully insured dental plans in California from imposing:

• A dental waiting period provision for certain services in large group dental plans that are fully insured, or

• A pre-existing condition exclusion provision in any dental plan that is fully insured.

This law, effective for insurance policies and health maintenance organization (HMO) dental contracts issued or renewed on or after January 1, 2025, does not apply to self-funded dental plans.

Background

Insurance carriers and HMOs often impose restrictions, such as waiting periods or pre-existing condition exclusions, to manage potential adverse selection from individuals delaying dental care until they obtain insurance. Common restrictions include:

• Waiting periods of 3–12 months before coverage for services like fillings, extractions, root canals, crowns, or dentures.

• Pre-existing condition exclusions, such as not covering teeth missing before coverage or dentures received under a prior plan.

In some cases, these restrictions may be waived if proof of continuous prior dental coverage is provided.

New California Dental Insurance Law

As of January 1, 2025, insurers and HMOs may no longer include:

• Dental waiting period provisions in large group dental plans.

  • These provisions limit coverage for certain services during a specified period after the coverage start date.

• Pre-existing condition provisions in any dental plan.

  • These provisions exclude or limit coverage for conditions treated or diagnosed before the coverage start date.

This law applies to large and small group plans, as defined by California regulations.

Application of the New Law

The law applies to:

• Group dental insurance policies issued or delivered in California.

• Dental HMOs operating in California.

• Group dental policies covering California residents issued outside California, except when:

  • The employer’s principal place of business is outside California, and

  • A majority of employees are located outside California.

The law does not apply to self-funded dental plans.

Employer Action

Compliance is the responsibility of insurance carriers and HMOs. Employers should note that premiums for fully insured plans may increase due to this mandate.

Employers looking to maintain provisions like waiting periods or pre-existing condition exclusions may consider switching to self-funded dental plans.