LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
March 2, 1995
TO: Honorable John Smithee IN RE: House Bill No. 222,
Committee on Insurance as amended
House of Representatives By: Brimer
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on House Bill No.
222 (relating to the licensing of agents for health maintenance
organizations) this office has determined the following:
The bill would amend the Insurance Code with new provisions for
licensing agents who represent health maintenance organizations
(HMO). The bill would also repeal similar provisions of the
Insurance Code, known as the Texas Health Maintenance
Organization Act effective January 1, 1998.
Implementation of the bill would require modification of license
application and renewal forms and changes to the examination for
Group 1 agents to include HMO questions. Programming changes to
the mainframe database for the Department of Insurance would also
be necessary. The bill would also require development and
adoption of new procedural rules. The Department anticipates
that most new workload would be associated with inquiries related
to the changes, potentially 3,000 inquiries during fiscal year
1996 and 1,500 during 1997. Costs for additional
responsibilities could be absorbed within existing similar
functions.
The Department anticipates that revenue losses would result from
the bill's provisions in connection with elimination of the HMO
agent license. Approximately 1,500 agents currently hold both
Group 1 and HMO licenses. The current application fee for an HMO
agent license is $60 and the renewal fee is $48. Revenue losses
of approximately $36,000 per year are projected based on the
current number of HMO agent licenses and present renewal rates.
The probable fiscal implication of implementing the provisions of
the bill during each of the first five years following passage
is estimated as follows:
Fiscal Probable Revenue
Year Loss from GR
Consolidated -
Department of
Insurance
Operating Fund 036
1996 $36,000
1997 36,000
1998 36,000
1999 36,000
2000 36,000
Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.
No fiscal implication to units of local government is
anticipated.
Source: Department of Insurance
LBB Staff: JK, RM, RR