| TO: | Honorable Dianne White Delisi, Chair, House Committee on Public Health |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | HB1297 by Delisi (Relating to the creation of the state employee wellness program.), As Introduced |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2008 | ($10,975,647) |
| 2009 | ($10,990,647) |
| 2010 | ($10,990,647) |
| 2011 | ($10,990,647) |
| 2012 | ($10,990,647) |
| Fiscal Year | Probable Savings/(Cost) from GENERAL REVENUE FUND 1 |
|---|---|
| 2008 | ($10,975,647) |
| 2009 | ($10,990,647) |
| 2010 | ($10,990,647) |
| 2011 | ($10,990,647) |
| 2012 | ($10,990,647) |
| Fiscal Year | Change in Number of State Employees from FY 2007 |
|---|---|
| 2008 | 4.0 |
| 2009 | 4.0 |
| 2010 | 4.0 |
| 2011 | 4.0 |
| 2012 | 4.0 |
The bill would implement Recommendations 1 and 2 of the Legislative Budget Board's Report, "Create a Comprehensive State Employee Wellness Program to Reduce State Costs."
The bill amends Government Code Chapter 664 to create a state employee wellness program and a statewide wellness coordinator at the Department of State Health Services (DSHS) to develop the program. The Commissioner would have the authority to adopt rules to implement the program. The bill would require the program to include a health risk survey, educational classes and health resources to improve the health and wellness of state employees, and employment practices that support the wellness program. The wellness coordinator would establish incentives to encourage participation, including providing leave time for physical activity and wellness program participation and coordinating discounts with gyms and fitness centers.
The bill requires that the program focus on the return of the state's investment in employee wellness. The statewide wellness coordinator would coordinate with the Employees Retirement System,
The bill would take effect on September 1, 2007.
The cost of a comprehensive wellness program and administration is estimated to be $11.0 million in General Revenue per year, excluding the cost of incentives.
The wellness program cost estimate is based on other comprehensive private and public sector workplace wellness programs' cost. Comprehensive wellness programs that include the components required by the bill cost $3 per employee per month. There are 297,173 active members of the state funded health plans at ERS, UT, & Texas A&M. Therefore, it is estimated that a statewide program that meets the provisions of Government Code chapter 664.053 would cost $10.7 million in General Revenue annually to be effective in reducing state employee health care costs.
DSHS estimates it would require four additional FTEs to develop and manage the state employee wellness program. The $292,000 administrative costs related to these positions would include annual General Revenue for salary and benefits for four FTEs, operating costs, and program materials.
The incentive structure in a wellness program directly affects the number of employees who choose to participate in a worksite wellness program. The bill does not specify the types of incentives the program would include; therefore, the cost of incentives and participation rate cannot be estimated. If the wellness program awarded employees a $50 annual cash bonus for participating in the program, and 50 percent of employees participated, the cost of incentives would be $7.4 million.
Wellness programs that offer employees incentives to change unhealthy behavior experience a 50-80 percent participation rate. With an effective incentive structure, a comprehensive worksite wellness program typically saves the employer $3-$6 for every $1 invested. The saving begins to accrue in 3 to 5 years after the inception of the program.
The Department of State Health Services (DSHS) provided a cost estimate to implement a basic statewide wellness program. A basic approach has not shown to be effective in reducing costs associated with preventable disease or markedly improving the health of employees.
| Source Agencies: | 537 State Health Services, Department of
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| LBB Staff: | JOB, CL, JI, DH
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