FISCAL NOTE
Date Requested: January 11, 2023
Time Requested: 09:32 PM |
| Agency: |
Public Employees Insurance Agency (PEIA) |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1712 |
Introduced |
HB2249 |
|
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| CBD Subject: |
|
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FUND(S):
PEIA Basic Insurance Fund
Sources of Revenue:
Special Fund
Legislation creates:
Increases Existing Expenses, 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.
It is PEIA’s understanding that this is a common policy of employers. Employees choosing to accept the premium increase to keep a spouse on PEIA’s plan would incur an upcharge in addition to the normal family plan premium at an actuarially determined rate. This actuarially determined premium adjustment factors in plan migration expectations for individuals shifting from family to an employee only or employee with child plan. 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.
Based on a study of taxable household income, it is assumed 55% of spouses have access to insurance with their own employer. PEIA also assumes that 35% of those other employer spouses will forego PEIA coverage because of the amount of premium PEIA would set for policyholders with family coverage. The actuarially determined spousal rate PEIA would charge is $150. The savings to the State PEIA Plan would be $23,000,000, and participating State Fund employers would incur $2,000,000 in additional premium costs for the 80/20 premium ratio correction spread 50% to employer and 50% to employee.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
-21,000,000 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
-21,000,000 |
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):
The 21M savings in the schedule is the net of the $23M savings to the State PEIA Plan and the $2M additional premium costs to State Fund Employers.
Memorandum
Person submitting Fiscal Note: April Taylor
Email Address: aprilataylor@wv.gov