The Real Cost of Not Knowing Who Regulates the Plan
Imagine a dental office in Los Angeles submits 80 claims in a month. Everything looks fine, until 12 come back denied. The dentist’s billing team files an appeal, only to find out weeks later that those patients were under federally regulated (ERISA) plans, not state ones. The appeals went to the wrong place.
The result?
Nearly $25,000 in delayed payments, and zero legal help from the state insurance board, because technically, the plan didn’t fall under its authority.
This scenario isn’t rare. It happens across California every single month. Dentists lose money, time, and sleep simply because the dental plan type wasn’t clearly disclosed.
To resolve this problem, California’s new disclosure law (AB 952) has been introduced. It requires every dental benefit plan to clearly show whether it’s state-regulated or federally regulated (ERISA), giving dentists the clarity they’ve always needed.
In this guide, you’ll learn exactly:
- What does this new rule mean?
- Why it matters for your dental insurance verification process.
- How to train your team to comply.
- And how dental billing services and insurance verification companies can help you stay ahead.
What Is the California Disclosure Rule?
The law “Assembly Bill 952 (AB 952)” was signed into effect to bring transparency between dental benefit plans, providers, and patients.
Starting January 2025, every dental plan operating in California must:
- Clearly state on its ID card whether it’s state-regulated or federally regulated (ERISA).
- Display this information in the plan’s online portal used by providers for verification.
- Provide this disclosure when eligibility or coverage is being determined (for example, during insurance verification or pre-authorization).
- Make it available upon request if there’s no online portal or if a dentist doesn’t have access.
This law ensures that dentists can finally see, upfront, which rules apply before submitting claims or appeals.
When Does This Rule Take Effect, and Who Does It Apply To?
The California Disclosure Rule (AB 952) takes effect on January 1, 2025. It applies to all dental benefit plans operating in California, including those offered by private employers, group plans, and insurers.
If you treat California patients, even if your practice is out of state, this rule still matters, because plans covering California residents must comply.
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Understanding the Difference: State vs. Federal (ERISA) Plans
Before this law, most dental offices treated every insurance plan the same way. But there’s a huge difference in how state-regulated and federally regulated (ERISA) plans work.
Let’s simplify this:
| Type | Who Regulates It | Who You Contact for Complaints | Key Feature |
|---|---|---|---|
| State-Regulated Plan | California Department of Insurance (CDI) or Department of Managed Health Care (DMHC) | State agencies | Must follow California insurance laws. Dentists get protection under state rules. |
| ERISA (Federal Plan) | U.S. Department of Labor | Federal government | Follows federal ERISA law. Exempt from most state-level rules. |
Why It Matters
When you send an appeal to the wrong authority, it’s automatically rejected. If you contact the state for a federally regulated plan, they’ll tell you, “We can’t help; it’s an ERISA plan.”
That’s lost time, delayed cash flow, and frustration.
This new disclosure law helps you avoid that confusion from day one.
Will Appeals or Denials Be Handled Differently for ERISA vs. State-Regulated Plans?
Yes. ERISA plans follow federal appeal rules under the Department of Labor, while state-regulated plans follow California’s Department of Insurance or DMHC rules.
Knowing this difference ensures you send appeals to the right agency the first time, saving weeks of delay and frustration.
How This Impacts Your Dental Insurance Verification?
Step 1: Start Every Case With Plan Identification
The new law ties directly into your dental insurance verification process.
When your team verifies coverage, they’ll now see whether the plan is state or federal.
That single piece of information changes everything:
- How your dental eligibility verification is recorded.
- Which appeal timelines apply.
- Who handles denials and follow-ups.
- What laws protect your payment rights.
Step 2: Train Staff to Record Plan Type on Every File
Every dental insurance verification form should now include a small but crucial field:
Plan Regulation:
- State-Regulated
- Federal (ERISA)
This one checkbox protects your practice from weeks of back-and-forth later.
Train your front desk or billing team to ask the insurer directly:
“Can you confirm if this plan is state-regulated or an ERISA plan?”
It’s a simple question, but it can save thousands in denied claims and wasted appeals.
What Should I Do if the Insurance Portal Doesn’t Show Whether the Plan Is State or Federal?
If the plan’s online portal doesn’t display the regulation type, your team should:
- Call the payer directly and ask for confirmation.
- Document the rep’s name, date, and response on your dental insurance verification form.
- Keep the call log for compliance and audits.
This ensures you stay protected if questions arise later.
The Verification Workflow After AB 952
Here’s how your insurance verification dental process should look from now on:
Step 1: Collect the Insurance Details
Gather the patient’s insurance ID, group number, and employer name.
Check the card for “State-Regulated” or “ERISA” marking.
Step 2: Log In to the Plan Portal
Use your online access to verify eligibility and benefits.
The portal must now display regulation type (per AB 952).
Step 3: Confirm the Details
- Plan type (state or ERISA).
- Patient eligibility dates.
- Annual maximums, deductibles, and coverage percentages.
- Waiting periods and exclusions.
Step 4: Fill the Dental Insurance Verification Form
Update the dental insurance eligibility verification record.
Add all coverage details, co-pays, and notes about plan regulations.
Step 5: Verify for Each Procedure
For every procedure code, check if:
- It’s covered.
- Requires pre-authorization.
- Has frequency limits or exclusions.
This is called procedure-level insurance benefits verification, and it prevents rejections.
Step 6: Flag ERISA Plans for Special Handling
If the plan is ERISA, tag it in your system.
ERISA claims follow federal appeal timelines, not state.
This distinction ensures your dental billing services or team knows which set of laws applies when something gets denied.
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How Lack of Disclosure Previously Cost Dentists Money
Before AB 952, here’s what often went wrong:
- Dentists appealed to the wrong department and missed deadlines.
- Some plans used the confusion to delay or deny payments.
- Practices couldn’t recover money because no one had jurisdiction to help.
- Billing companies spent hours re-processing claims with no success.
In short, the system wasn’t transparent, and the dentist always lost.
Now, with this law, you’ll know exactly which path to follow and can use dental insurance verification services to streamline everything.
The Legal and Financial Benefits
Clarity = Faster Payments
With disclosure, your billing team wastes no time guessing who regulates the plan. Claims and appeals go to the right place immediately, speeding up reimbursement.
Compliance Protection
Recording the plan type during dental insurance eligibility verification proves your compliance during audits or disputes.
Fewer Denials, More Approvals
When you know the plan rules, you meet their requirements the first time. That means fewer rejections, less resubmission, and smoother cash flow.
Better Patient Trust
Patients appreciate transparency. You can now explain:
“Your plan is ERISA, so we’ll handle your claim differently.”
That builds confidence and shows professionalism.
What Are the Financial Risks If I Send an Appeal to the Wrong Agency?
Appeals sent to the wrong body are automatically rejected. For example, if you send an ERISA plan appeal to a state department, it won’t even be reviewed. This can result in missed deadlines and unrecoverable revenue, sometimes costing practices thousands in lost payments.
Is Documentation of Plan Regulation Type Required for Audits or Compliance Checks?
Yes. Under AB 952, documenting the plan’s regulation type during dental insurance eligibility verification shows that your practice followed due diligence. Auditors can request this documentation anytime; having it recorded protects you from penalties.
Are Insurance Companies Required to Update Patient ID Cards With Regulation Info?
Yes. As of January 2025, dental ID cards must clearly state if the plan is state-regulated or federally regulated (ERISA). Both physical and digital cards must display this, giving your staff instant clarity before billing.
How Can Accurate Insurance Benefits Verification Reduce Write-Offs and Claim Delays?
Accurate insurance benefits verification ensures claims go out clean the first time. When you verify plan type, benefit limits, and coverage rules correctly, you minimize write-offs, reduce appeals, and maintain faster cash flow.
How Dental Billing Services & Verification Companies Can Help
Many practices are now turning to dental insurance verification companies and dental billing services to manage this transition.
Here’s how they help:
Automation
Modern dental insurance verification services use AI tools to automatically identify plan type, verify benefits, and fill forms.
Compliance Support
Billing partners stay updated with new state and federal laws, including AB 952, ensuring you stay compliant without worrying about legal changes.
Time Savings
Instead of spending hours on hold with insurance reps, your billing partner handles insurance benefits verification behind the scenes while you focus on patient care.
Fewer Human Errors
Automated verification eliminates manual typos or missed details in your dental insurance verification form.
Revenue Protection
When denials happen, professional billing companies know exactly where to appeal, the state board or the federal ERISA route, preventing lost revenue.
Updating Your Dental Insurance Verification Form
Your form now needs to include new fields to meet AB 952 compliance.
Here’s what should be added:
Patient and Plan Details
- Patient name, DOB, ID number, and employer.
Coverage Information
- Active dates, deductible, annual max, and co-pay.
Plan Regulation Type
- State-Regulated
- ERISA (Federal)
Pre-Authorization Requirements
- List of procedures needing prior approval.
Notes Section
- For staff to record portal confirmation or phone verification.
If you’re using a dental insurance verification company, they can customize your forms or integrate digital versions into your PMS.
California’s AB 952 is more than just another rule it’s a turning point for the dental industry. It pushes the system toward honesty, accountability, and financial stability.
For years, dentists operated with partial information.
Now, with required plan disclosures, the balance shifts.
You can finally see who controls the plan, understand your rights, and act with confidence from the very start of the dental insurance verification process.
Key Takeaways:
- The California Disclosure Rule (AB 952) requires dental plans to show whether they’re state-regulated or federally regulated (ERISA).
- This impacts every step of your dental insurance verification and dental billing services workflow.
- Knowing plan type helps prevent denials, guide appeals correctly, and improve payment speed.
- Update your dental insurance verification form and train staff accordingly.
- Consider using dental insurance verification services or companies to stay compliant and efficient.
Final Word
Dentists already handle patient care, staffing, and compliance challenges daily.
The last thing they need is another surprise from an unclear insurance plan. By aligning your dental insurance verification process with California’s new disclosure law, you protect your time, your payments, and your peace of mind. Transparency is no longer optional; it’s the foundation of a smarter, stronger dental practice.
