LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
April 4, 1997
TO: Honorable Barry Telford, Chair IN RE: House Bill No. 1700
Committee on Pensions and Investments By: Rangel
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB1700 ( Relating
to group health coverage for school district employees.) this
office has detemined the following:
Biennial Net Impact to General Revenue Funds by HB1700-As Introduced
Implementing the provisions of the bill would result in a net
negative impact of $(2,164,000) 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
Under current law, each school district must make available
to its employees health coverage that is comparable to the basic
health coverage provided to state employees under the Texas
Employees Uniform Group Insurance Benefits Act. HB1700 transfers
the responsibility of certification of compliance from the school
districts to the TRS executive director. Each district must
report to the executive director that its plan is substantially
similar to the state employees' plan, and the report must be
provided not later than November 1 of each year. In making
the determination that a district's plan is comparable, the
executive director of TRS must examine the entity underwriting
the district's plan, the costs paid by the employees, the costs
paid by the employer, the schedule of benefits, and the length
of the period that the provider has offered coverage in a district.
If the executive director finds that a district is not in compliance,
that information shall be reported to the district and to the
LBB. In addition, the executive director must report to the
Legislature on the status of each district's plan by January
1 of odd-numbered years.
Methodolgy
TRS projects that much of the analysis required by the bill
would be performed by the system's consulting actuary. Certification
of districts offering fully insured plans is expected to require
very little time. For districts that are self-funded or provide
health coverage as part of a cafeteria plan, the certification
is expected to be more time-consuming. On average, TRS estimates
that the cost of each analysis would be $1,000 per district,
based on an hourly billing rate of the actuary of $200-250.
There are 1,082 districts in the state, so the total annual
cost to the General Revenue Fund is estimated to be $1,082,000.
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 General
Revenue Fund
0001
1998 ($1,082,000)
1998 (1,082,000)
2000 (1,082,000)
2001 (1,082,000)
2002 (1,082,000)
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 ($1,082,000)
1999 (1,082,000)
2000 (1,082,000)
2001 (1,082,000)
2002 (1,082,000)
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: Agencies: 323 Teacher Retirement System and Optional Retirement Program
LBB Staff: JK ,PE ,SC