LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session May 20, 1997 TO: Honorable David Sibley, Chair IN RE: House Bill No. 1173, Committee Report 2nd House, Substituted Committee on Economic Development By: Coleman Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB1173 ( Relating to coverage by certain health benefit plans for certain serious mental illnesses.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB1173-Committee Report 2nd House, Substituted FN Revision 1 Implementing the provisions of the bill would result in a net impact of $0 to General Revenue Related Funds through the biennium ending August 31, 1999. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. Fiscal Analysis This bill would amend Article 3.51-14 of the Insurance Code to expand the definition of serious mental illness, as covered by a health benefit plan. This bill would be applicable to Health Maintenance Organizations (HMOs) participating in the state managed care system and only to health benefit plans that are delivered, issued for delivery, or renewed on or after January 1, 1998. As a result, the bill would increase HMO costs for the Employee Retirement System (ERS) by $100,000 in fiscal year 1999, $105,000 in fiscal year 2000, $110,000 in fiscal year 2001, and $116,000 in 2002. Methodolgy This analysis is based on the following assumptions: 1. HMO premiums would increase as a result of providing the expanded coverage that is required by the bill; and, 2. Increased HMO premiums would increase expenses to the Uniform Group Insurance Plan (UGIP), Fund 973. Increased costs to Fund 973 were calculated by ERS' health actuary. The probable fiscal implications of implementing the provisions of the bill during each of the first five years following passage is estimated as follows: Five Year Impact: Fiscal Year Probable Savings/(Cost) from Employee Life 0973 1998 1998 (100,000) 2000 (105,000) 2001 (110,000) 2002 (116,000) Net Impact on General Revenue Related Funds: Fiscal Year Probable Net Postive/(Negative) General Revenue Related Funds Funds 1998 $0 1999 0 2000 0 2001 0 2002 0 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: Agencies: 327 Employees Retirement System LBB Staff: JK ,TH ,BK