FISCAL NOTE
Date Requested: January 10, 2020
Time Requested: 03:51 PM |
| Agency: |
Public Employees Insurance Agency (PEIA) |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1104 |
Introduced |
SB95 |
|
|---|
| CBD Subject: |
Insurance |
|---|
|
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 authorize the West Virginia Public Insurance Agency to establish base benefits insurance plans. The base plans are to establish benefits equivalent with a bronze, silver and gold insurance plan as referenced in the Affordable Care Act (ACA.)
It is PEIA’s understanding these plans will be additional plan offerings to employees as defined in WV §5-16-2 by licensed providers of health insurance contracted with PEIA. The health insurance plans will be permitted to deliver these plans with a 90% medical loss ratio (MLR.) Any portion of the MLR below 90% must be returned to the plan as benefits, premium or refunds.
PEIA believes this bill will result in increased costs due to implementation and ongoing administration expenses. Implementation costs including actuarial analyses are estimated to be $5,000 with ongoing administration expense worth $1,000 a year.
Depending on how the new offerings are administered there could be a potential for additional costs due to the 90% MLR, as PEIA generally operates with a higher MLR of approximately 94%. PEIA’s absence of profit taking results in lower costs. A four percent difference is approximately $11.00 per member per month.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2020
Increase/Decrease
(use"-") |
2021
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
6,000 |
1,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
6,000 |
1,000 |
| 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):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
Memorandum
Depending on how the new offerings are administered there could be a potential for additional costs due to the 90% MLR, as PEIA generally operates with a higher MLR of approximately 94%. PEIA’s absence of profit taking results in lower costs. A four percent difference is approximately $11.00 per member per month.
Person submitting Fiscal Note: Jason Haught
Email Address: jason.a.haught@wv.gov