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