LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 13, 1999 TO: Honorable Jane Nelson, Chair, Senate Committee on Health Services FROM: John Keel, Director, Legislative Budget Board IN RE: SB377 by Nelson (Relating to review and implementation of health care benefits required to be provided under certain health benefit plans.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB377, As Introduced: negative impact of $(1,100,000) through the * * biennium ending August 31, 2001. * * * * The bill would make no appropriation but could provide the legal * * basis for an appropriation of funds to implement the provisions of * * the bill. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $(750,000) * * 2001 (350,000) * * 2002 400,000 * * 2003 0 * * 2004 (350,000) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Savings/(Cost) from Probable Revenue Gain/(Loss) * * Year General Revenue Fund from General Revenue Fund * * 0001 0001 * * 2000 $(750,000) $0 * * 2001 (350,000) 0 * * 2002 (350,000) 750,000 * * 2003 (350,000) 350,000 * * 2004 (350,000) 0 * *************************************************************************** Fiscal Analysis The bill would amend Chapter 3 of the Insurance Code to require the Comptroller to analyze existing and proposed health care mandates under certain conditions and to impose an assessment against writers of health care benefit plans to cover the expenses incurred in conducting such analyses. The bill would allow the Governor, the Lieutenant Governor, the Speaker of the House of Representatives, a presiding officer of a standing legislative committee, a legislative research organization, the Legislative Budget Board, or the Commissioner of Insurance to request that the Comptroller provide a detailed analysis of any existing or proposed health care benefit mandate. The bill would also require the Comptroller to review and analyze each health care benefit mandate that will be in effect on January 1, 2001. The report would have to be published on the Internet and issued to the Governor, the Lieutenant Governor, the Speaker, and the Commissioner of Insurance. To cover the expenses incurred with fulfilling the additional responsibilities mandated by this bill, the Comptroller would be authorized to collect an annual assessment from all entities selling health benefit plan coverage in the state. The assessment would have to be calculated at the end of each fiscal year for the Comptroller's covered expenses for the preceding calendar year. The assessment would have to be based on annual statements and other reports filed with the Texas Department of Insurance. It would be imposed on each entity in proportion to that entity's gross premium collections in the preceding calendar year to all gross written premiums written in the state in the preceding calendar year. Medicare supplement premiums subject to Article 3.74 would not be included in the calculation. This provision would expire September 1, 2003. This bill would take effect September 1, 1999. Methodology The Comptroller's Office estimates negligible set-up costs in calendar 1999 related to soliciting proposals and negotiating a contract for an outside vendor to conduct the initial study. For this reason, at the end of fiscal 2000, there would be no need to calculate an assessment for collection in March, 2001, the uniform due date for insurance taxes and fees collected by the Comptroller. The Comptroller's Office assumes that the study would be conducted in its entirety in calendar 2000 and that the Comptroller would calculate the assessment on August 31, 2001, based on calendar 2000 premiums reported to the Department of Insurance. This assessment would fall due March 1, 2002. The revenue gain in fiscal 2003 reflects the assessment for annual Comptroller expenses incurred in analyzing existing and proposed health care benefit mandates in fiscal 2001. Because the bill would prohibit the Comptroller from levying any assessments after September 1, 2003, there would be no revenues accruing in fiscal 2004 or thereafter to defray the Comptroller's costs incurred in calendar 2002 and thereafter. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 454 Department of Insurance, 304 Comptroller of Public Accounts LBB Staff: JK, TP, RT, DP