LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 15, 1999 TO: Honorable Florence Shapiro, Chair, Senate Committee on State Affairs FROM: John Keel, Director, Legislative Budget Board IN RE: SB1351 by Barrientos (Relating to health benefits plan coverage for children of certain employees paid by state appropriated money.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB1351, As Introduced: negative impact of $(25,305,161) 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. * * * * Senate Bill 2 as marked up includes $13.2 million in General * * Revenue to fund 80% of the premium costs for covering dependent * * children. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $(314,000) * * 2001 (24,991,161) * * 2002 (26,990,454) * * 2003 (29,149,690) * * 2004 (31,481,666) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Probable Probable Probable * * Year Savings/(Cost) Savings/(Cost) Savings/(Cost) Savings/(Cost) * * from General from All from Federal from Other * * Revenue Fund GR-Dedicated Funds Funds * * 0001 Accounts 0555 8042 * * 8021 * * 2000 $(314,000) $0 $0 $0 * * 2001 (24,991,161) (1,393,541) (6,929,436) (5,631,562) * * 2002 (26,990,454) (1,505,024) (7,483,791) (6,082,087) * * 2003 (29,149,690) (1,625,426) (8,082,494) (6,568,654) * * 2004 (31,481,666) (1,755,460) (8,729,094) (7,094,146) * *************************************************************************** ***************************************************** * Fiscal Year Probable Savings/(Cost) from * * Higher Education Funds - Outside * * Treasury * * 2000 $0 * * 2001 (1,663,200) * * 2002 (1,796,256) * * 2003 (1,939,956) * * 2004 (2,095,153) * ***************************************************** Fiscal Analysis The bill would increase the state's contribution to 100% of the cost of dependent coverage for employees with family incomes of less than 200% of the federal poverty who do not qualify for Medicaid. The bill would increase the state's contribution for the cost of dependent child coverage for certain state employees. Currently, the state pays 50% of the costs of coverage of dependent children participating in the Uniform Group Insurance Program, and 80% of the cost of coverage of dependent children participating in the health insurance programs administered by the University of Texas System and the Texas A&M System. The Department of Human Services would be responsible for screening for eligibility. Methodology The Employees Retirement System (ERS) estimates that approximately 20,600 of the 209,000 state employees covered by ERS' health insurance program would have dependent children and have family incomes low enough to be covered by this bill. The annual cost per employee for covering dependent children is estimated at $2,064 in FY2001, increasing by 8.0% per year to $2,600 in FY2004. The number of state employees is estimated to remain constant. It is also assumed that 50% of the employees covered by this bill have already enrolled their dependent children, and therefore the state is already paying part of the cost. For the other 50% of affected employees, the increased cost to the state would be for the full 100% of the cost of coverage. The University of Texas System estimates that approximately 7,500 employees covered by UT's health insurance program would have dependent children and have family incomes low enough to be covered by this bill. The annual cost per employee for covering dependent children is estimated at $2,203 in FY2001, increasing by 8.0% per year to $2,775 in FY2004. The number of employees is estimated to remain constant. It is also assumed that 80% of the employees covered by this bill have already enrolled their dependent children, and therefore the state is already paying part of the cost. For the other 20% of affected employees, the increased cost to the state would be for the full 100% of the cost of coverage. The Texas A&M System estimates that approximately 4,400 employees covered by A&M's health insurance program would have dependent children and have family incomes low enough to be covered by this bill. The annual cost per employee for covering dependent children is estimated at $1,750 in FY2001, increasing by 8.0% per year to $2,204 in FY2004. The number of employees is estimated to remain constant. It is also assumed that 80% of the employees covered by this bill have already enrolled their dependent children, and therefore the state is already paying part of the cost. For the other 20% of affected employees, the increased cost to the state would be for the full 100% of the cost of coverage. This analysis assumes that eligibility screening would occur during FY2000, with the increase in the state's contribution beginning in FY2001. The Department of Human Services projects that the agency will incur $314,000 in one-time costs in FY2000 for making programming changes in order to screen the state employees for eligibility. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 529 Health and Human Services Commission, 324 Department of Human Services, 327 Employees Retirement System, 720 The University of Texas System Administration, 323 Teacher Retirement System, 710 A&M University System Texas LBB Staff: JK, SD, SC