FISCAL NOTE

Date Requested: February 01, 2019
Time Requested: 12:20 PM
Agency: Public Employees Insurance Agency (PEIA)
CBD Number: Version: Bill Number: Resolution Number:
2934 Introduced HB2810
CBD Subject: Insurance, State Personnel


FUND(S):

PEIA Basic Insurance

Sources of Revenue:

Special Fund

Legislation creates:

Increases Existing Expenses



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    The purpose of this bill is to alter the method of calculation of the 80-20 employer/employee match that is required under current law for calculation of payments for PEIA premiums. PEIA’s understanding of this bill is to move the requirement of the eighty percent employer, and twenty percent employee premium cost share to the plan’s increase in forecast healthcare expenditures.
    
    This bill requires State Fund employers to fund all healthcare cost increases at a minimum of eighty percent, regardless. The bill states the employees’ twenty percent share of projected increases shall include any combination of increases in premiums, deductibles, copayments, co-insurances, out of pocket maximums and any benefit reductions or wellness costs. Therefore, some methodologies employed to mitigate the State Fund risk pool’s exposure to health care cost inflation will result in the entire increase being funded by State Fund employers.
    
    Utilizing the most recent actuarial report, this bill will result in the State having an additional $45 million funding mandate in Fiscal Year 2021, $51 million additional in 2022 and an additional $58 million in 2023.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2019
Increase/Decrease
(use"-")
2020
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 45,000,000
Personal Services 0 0 0
Current Expenses 0 0 45,000,000
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


    This bill requires State Fund employers to fund all healthcare cost increases at a minimum of eighty percent, regardless. The bill states the employees’ twenty percent share of projected increases shall include any combination of increases in premiums, deductibles, copayments, co-insurances, out of pocket maximums and any benefit reductions or wellness costs. Therefore, some methodologies employed to mitigate the State Fund risk pool’s exposure to health care cost inflation will result in the entire increase being funded by State Fund employers.
    
    Utilizing the most recent actuarial report, this bill will result in the State having an additional $45 million funding mandate in Fiscal Year 2021, $51 million additional in 2022 and an additional $58 million in 2023.



Memorandum


    Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.



    Person submitting Fiscal Note: Jason Haught
    Email Address: jason.a.haught@wv.gov