| TO: | Honorable Joe Straus, Speaker of the House, House of Representatives |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | HB4341 by Truitt (Relating to the regulation of discount health care programs by the Texas Department of Insurance; providing penalties. ), As Passed 2nd House |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2010 | $0 |
| 2011 | $0 |
| 2012 | $0 |
| 2013 | $0 |
| 2014 | $0 |
| Fiscal Year | Probable Revenue Gain from Dept Ins Operating Acct 36 |
Probable (Cost) from Dept Ins Operating Acct 36 |
Probable Revenue Gain from Insurance Maint Tax Fees 8042 |
Probable (Cost) from Insurance Maint Tax Fees 8042 |
|---|---|---|---|---|
| 2010 | $134,000 | ($121,091) | $0 | $0 |
| 2011 | $67,000 | ($67,000) | $44,875 | ($44,875) |
| 2012 | $67,000 | ($67,000) | $44,875 | ($44,875) |
| 2013 | $67,000 | ($67,000) | $44,875 | ($44,875) |
| 2014 | $67,000 | ($67,000) | $44,875 | ($44,875) |
| Fiscal Year | Change in Number of State Employees from FY 2009 |
|---|---|
| 2010 | 2.0 |
| 2011 | 2.0 |
| 2012 | 2.0 |
| 2013 | 2.0 |
| 2014 | 2.0 |
The bill would amend the Insurance Code to establish the registration and regulation of discount health care programs at the Texas Department of Insurance (TDI). The bill would also amend the Health and Safety Code to repeal the discount health care program registration process through the Texas Department of Licensing and Regulation (TDLR). The bill would require TDI to create the registration process, regulate the programs, and adopt rules to implement this program. The bill would require the discount health care program operator to pay TDI an initial registration fee of $1,000 and an annual renewal fee not to exceed $500 to be deposited in the TDI Operating Account 36.
The elimination of the discount health care program registration process at TDLR would take effect on April 1, 2010. The enforcement of the new program at TDI would take effect on April 2, 2010.
Except as stated above, the bill would take effect on September 1, 2009.
Based on analysis provided by TDLR, 34 discount health care programs are currently registered. Preliminary research conducted by TDI indicates that additional discount plans may still be operating without being registered, which would result in an increase in at least 100 more discount health plans due to the implementation of the bill.
Implementation of the bill would require an additional 2 FTEs at TDI to create and operate the registration process. For each fiscal year of 2010-14, the 2 FTEs will cost $83,787 in salaries with associated benefits cost of $23,938, and telephone, consumable, and other operating costs of $4,150. Additionally, a one-time equipment cost of $9,216 is anticipated in fiscal year 2010.
Revenue collected from discount health care program registration fees would be deposited into Texas Department of Insurance Operating Account 36 and revenues collected from the fees would be used to offset costs for the regulation requirements of the bill. Since TDI is a self-leveling agency, this analysis assumes the costs to implement the provisions of the bill above amounts collected and deposited to the credit of the Texas Department of Insurance Operating Account 36 fund would be covered from fund balances or maintenance tax revenues.
Since TDLR is statutorily required to cover the costs of its operation from generated fee revenues, this analysis assumes a cost savings of $17,000 each fiscal year in General revenue would offset a corresponding revenue loss of the same amount from renewals for 34 discount health care programs that would not be collected. Accordingly, the overall fiscal implication to TDLR is assumed to be insignificant. Furthermore, it is also assumed that duties and responsibilities for TDLR related to implementing the provisions of the bill could be absorbed within existing resources.
| Source Agencies: | 454 Department of Insurance, 452 Department of Licensing and Regulation
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| LBB Staff: | JOB, CL, MW, CH
|