FISCAL NOTE

Date Requested: January 26, 2023
Time Requested: 09:47 AM
Agency: Public Employees Insurance Agency (PEIA)
CBD Number: Version: Bill Number: Resolution Number:
2619 Introduced HB3028
CBD Subject: Insurance


FUND(S):

PEIA Basic Insurance Fund

Sources of Revenue:

Special Fund

Legislation creates:





Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


The purpose of this bill is to permit teachers to use the shared personal leave bank to convert annual leave days into reduced price insurance premiums upon retirement. The bill indicates that the Board of Education has the authority set the rules regarding to what extent the personal leave bank may be used for conversion. Employees of a PEIA-participating employer with coverage through PEIA that have accrued sick and/or annual leave when they retire, may be eligible to use that accrued leave to extend employer-paid insurance coverage. There are currently two categories of active policyholders eligible for this benefit: 1. Policyholders with hire dates prior to July 1, 1988, are eligible to convert their sick and annual leave at the rate of 2 days of accrued leave covering 100% of one month of a single plan premium or 3 days of accrued leave covering 100% of one month of family plan premium. 2. Policyholders with hire dates between July 1, 1988, and June 30, 2001, are eligible to convert their sick and annual leave at the rate of 2 days of accrued leave covering 50% of one month of a single plan premium or 3 days of accrued leave covering 50% of one month of family plan premium. Policyholders hired on or after July 1, 2001, or those having a lapse in coverage after this date, are not eligible for extended employer-paid insurance upon retirement. A study of PEIA policyholders indicates there are only 733 teachers eligible for 100% of premium leave conversion and 4,590 eligible for 50% of premium leave conversion as of January 2023. Based on plan experience, approximately 110 of the teachers eligible for 100% leave conversion, and 350 of the teacher’s eligible for 50% leave conversion, retire annually. Using blend of Medicare and non-Medicare rates in the 20-25+ years of service premium categories and assigning the population 85% family coverage/ 15% single coverage, it could cost County employers $111,000 per month of employer-paid insurance for these retirees in a given year. Since this is an employer-paid benefit, PEIA would incur no expense to the Plan for these conversions. PEIA receives funding from the State via the school aid formula which does pay County employer insurance costs, but these funds are not used to pay retiree leave conversion premiums.



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 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):


Since this is an employer-paid benefit, PEIA would incur no expense to the Plan for these conversions. PEIA receives funding from the State via the school aid formula which does pay County employer insurance costs, but these funds are not used to pay retiree leave conversion premiums.



Memorandum






    Person submitting Fiscal Note: April Taylor
    Email Address: april.a.taylor@wv.gov