FISCAL NOTE
Date Requested: January 22, 2019 Time Requested: 01:17 PM |
Agency: |
Public Employees Insurance Agency (PEIA) |
CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
2301 |
Introduced |
SB386 |
|
CBD Subject: |
Governor -- Bills Requested By |
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|
FUND(S):
PEIA Basic Insurance
Sources of Revenue:
Special Fund
Legislation creates:
Increases Existing Expenses, Creates New Fund: PEIA Rainy Day Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to remove the requirement that any amount more than 15 percent of the recommended PEIA reserve be transferred into the Retiree Health Benefit Trust Funds and establish the PEIA Rainy Day Fund and Fee. Removal of the requirement to transfer any amount more than 15 percent of the recommended reserve will create minimal administrative savings for PEIA. Since inception of this requirement, there has never been a required transfer of reserves to RHBT. However, each year PEIA must perform the calculation to assure compliance with a requirement that has no true impact on the fiscal stability as the PEIA Finance Board determines the financing for both PEIA and RHBT. Additionally, maintaining excess monies in the active PEIA accounts allows much more flexibility to distribute costs. Once monies are moved to the Retiree Health Benefit Trust, it must be used exclusively for retirees.
Establishment of the PEIA Rainy Day Fund (Fund) and Fee will provide some flexibility to the State in financing the costs of PEIA. This flexibility is achieved through the ability to assess a fee on State Fund employers (State Agencies, Colleges and Universities, Boards of Education), thereby generating revenue which may be exempt from the 80 percent employer and 20 percent employee premium ratio requirement of WV ยง5-16-5(g). The fiscal impact to PEIA is unknown.
However, any funding received from the Fund will most likely be in lieu of benefit changes to offset healthcare cost inflation and deemed exempt of the 80/20 funding ratio requirement. This will permit plan benefit levels and employee cost sharing to remain constant. The result of this action would be increased costs to State Fund employers.
Fiscal Note Detail
Effect of Proposal |
Fiscal Year |
2019 Increase/Decrease (use"-") |
2020 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):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
Person submitting Fiscal Note: Jason Haught
Email Address: jason.a.haught@wv.gov