FISCAL NOTE
Date Requested: January 20, 2022
Time Requested: 02:23 PM |
| Agency: |
Public Employees Insurance Agency (PEIA) |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1527 |
Introduced |
HB4310 |
|
|---|
| CBD Subject: |
State Personnel |
|---|
|
FUND(S):
PEIA Basic Insurance Fund
Sources of Revenue:
Special Fund
Legislation creates:
Decreases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to shift the financial burden of spousal coverage from the employer, as defined in §5-16-2(4), to the employee in the event that a spouse covered under PEIA has a private employer coverage option.
Although this would result in higher family premiums for our family policyholders with spouses having coverage available to them through their employer, it is PEIA’s understanding that this is a common policy of employers. This policy results in a cost shift of healthcare insurance costs from these employers to their spouse’s employer. With the PEIA premium structure based on only the policyholder’s salary and a lack of a similar spousal coverage policy, much of these costs are believed to be shifted to PEIA employers.
Employees choosing to accept the premium increase to keep a spouse on PEIA’s plan would be charged $98-109 in addition to the normal family plan premium. This actuarially determined premium adjustment factors in plan migration expectations for individuals shifting from family to an employee only or employee with child plan. Assuming that 75% of spouses currently covered have access to other coverage through a private employer, and 25% to 50% of those will forego coverage with PEIA, the savings to participating employers would be between $21,500,000-42,800,000 annually. Additionally, with the same assumptions, because the claims savings for spouses terminating coverage with PEIA is greater than the premium component charged for spouses there would be a potential savings to PEIA between $11,000,000- 12,000,000.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2022
Increase/Decrease
(use"-") |
2023
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
-43,655,410 |
0 |
| Personal Services |
0 |
-32,155,410 |
0 |
| Current Expenses |
0 |
-11,500,000 |
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):
Assuming that 75% of spouses currently covered have access to other coverage through a private employer, and 25% to 50% of those will forego coverage with PEIA.
Estimated total savings above is shown at the midpoint of the range, if 37.5% of spouses forego coverage with PEIA:
PEIA Plan savings $11,500,000
*Employer (State) savings $32,155,410
Total savings $43,655,410
*The personal service reduction is the premium reduction for employers.
Memorandum
Person submitting Fiscal Note: April Taylor
Email Address: April.A.Taylor@wv.gov