FISCAL NOTE
Date Requested: January 18, 2023
Time Requested: 10:35 PM |
| Agency: |
Public Employees Insurance Agency (PEIA) |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2271 |
Introduced |
HB2534 |
|
|---|
| CBD Subject: |
State Personnel |
|---|
|
FUND(S):
PEIA Basic Insurance Fund
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.
This bill amends sections of the WV Code pertaining to Public Employees Insurance Agency to insert various solvency measures for the Plan. The bill sets the minimum reimbursement rate for PEIA to 110% of Medicare’s reimbursement rates. Language has been inserted to §5-16-13(b)(2) exempting applicable employers from paying any portion of premium for employee spouses that have health insurance available through an employer not defined by §5-16-2. The bill introduces §5-16-30, a new section of code, which outlines a five-year plan to reduce salary tiers used to set premiums by PEIA, and incremental premium increases for employee and employer contributions to rebalance the 80/20 cost sharing percentages.
PEIA’s State Plan would incur $49,400,000 in additional claims expense annually to adjust reimbursement rates to 110% of Medicare for all services, $21,000,000 in savings for the changes to employee spouse eligibility and $7,000,000 in savings for the restriction of employer and employee funds going to Medicaid. The net fiscal impact to the State Plan if the bill passes is $21,400,000 in additional expense annually.
Reducing the number of salary tiers can be implemented with revenue neutral effect to the Plan overall. Premium increases over the five-years would result in PEIA receiving less State dollars from budget transfers respectively, and thus this will also have no fiscal impact on the Plan. PEIA is unable to ascertain the intent of the sentence in §5-16-30, “after the fifth year, PEIA shall adjust the premium rate to the Medicare rate to maintain the 80/20.” PEIA recommends the last sentence of §5-16-30 be amended for clarification. Accordingly, PEIA has not prepared a fiscal estimate.
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 |
0 |
21,400,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
21,400,000 |
| 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):
§5-16-28 of the bill states PEIA employer and employee funds may not be used to fund Medicaid. This language appears to attempt to prevent PEIA from transferring money from the PEIA reserve fund as permitted by §11B-2-15(b). If so, a point of clarification is necessary as PEIA doesn't have access to, or authorization to utilize this fund. If this is the intent, the revision to disallow the Budget Office to transfer the PEIA reserve fund balance, as permitted by §11B-2-15(b), to the Bureau for Medical Services (BMS) for federal matching purposes, should be made in §11B-2-15(b). The $7,000,000 savings estimate is based on transferring the PEIA Reserve fund balance to PEIA instead of BMS. Without a replacement of this transfer amount to BMS for federal matching purposes, the State will reduce hospital reimbursement by $21 million.
Memorandum
Person submitting Fiscal Note: April Taylor
Email Address: april.a.taylor@wv.gov