LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 16, 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), Committee Report 1st House, Substituted ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB1351, Committee Report 1st House, Substituted: negative impact * * of $(13,151,791) 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 Net Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $0 * * 2001 (13,151,791) * * 2002 (14,203,934) * * 2003 (15,340,249) * * 2004 (16,567,469) * **************************************************** 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 $0 $0 $0 $0 * * 2001 (13,151,791) (1,021,930) (5,081,587) (4,129,812) * * 2002 (14,203,934) (1,103,684) (5,488,114) (4,460,197) * * 2003 (15,340,249) 1,191,979 (5,927,163) (4,817,013) * * 2004 (16,567,469) (1,287,337) (6,401,336) (5,202,374) * *************************************************************************** Fiscal Analysis The bill would increase the state's contribution for the cost of dependent child health insurance coverage to 80% for children who would otherwise qualify for the Children's Health Insurance Program, but are excluded because they are children of 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. The increased contributions for health insurance would begin September 1, 2000. 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 cost of paying 80% of the premiums. The University of Texas System and the Texas A&M System estimate that approximately 11,900 employees covered by their health insurance programs would have dependent children and have family incomes low enough to be covered by this bill. The Legislature already appropriates funds to the UT and A&M Systems with the intent that 80% of dependent coverage be paid, so no additional costs for UT and A&M employees are included in this analysis. This analysis assumes that eligibility screening would occur during FY2000, with the increase in the state's contribution beginning in FY2001. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: LBB Staff: JK, SD, SC