FISCAL NOTE
Date Requested: February 10, 2017
Time Requested: 09:31 AM |
| Agency: |
Public Employees Insurance Agency (PEIA) |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1315 |
Introduced |
HB2020 |
|
|---|
| CBD Subject: |
State Personnel |
|---|
|
FUND(S):
2180
Sources of Revenue:
Special Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to freeze PEIA employee premiums for three years.
Passage of this bill will affect premiums for fiscal years 2019 and 2020 as the financial plan for FY 2018 has already been approved and contains no premium increases. However, it will have detrimental ramifications on the funding mechanism of the Public Employees Insurance Agency (PEIA).
By law the State Fund employee premiums are to represent 20% of the premium revenue and employers are to represent 80%. By freezing one you have frozen all premiums. Freezing premiums will reduce forecast premium revenues by $111 million for the State fund. Of this amount $89 million is State employer premium and $22 million is State employee premium.
By law the PEIA Finance Board must maintain a reserve fund for the purposes of offsetting unanticipated claim losses in any fiscal year of 10%. Therefore, the plan will be required to implement benefit cuts to lower costs by the above $111 million.
Passage of this bill will save the State $89 million over fiscal years 2019 and 2020.
FY 2018 FY 2019 FY 2020 Total
Less Premium Increases
State Employer $0 ($37,000,000) ($52,000,000) ($89,000,000)
State Employee $0 ($9,300,000) ($13,000,000) ($22,300,000)
$0 ($46,300,000) ($65,000,000) ($111,300,000)
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2017
Increase/Decrease
(use"-") |
2018
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| 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):
By freezing employee premium, it will have frozen all premiums due to the 80/20 law.
Passage of this bill will save the State $89 million over fiscal years 2019 and 2020 as employer premium increases will not be possible.
FY 2018 FY 2019 FY 2020 Total
Less Premium Increases
State Employer $0 ($37,000,000) ($52,000,000) ($89,000,000)
State Employee $0 ($9,300,000) ($13,000,000) ($22,300,000)
$0 ($46,300,000) ($65,000,000) ($111,300,000)
Memorandum
Person submitting Fiscal Note: Jason Haught
Email Address: jason.a.haught@wv.gov