LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION

April 10, 2011

TO:	Honorable John T. Smithee, Chair, House Committee on Insurance
FROM:	John S O'Brien, Director, Legislative Budget Board
IN RE:	HB758 by Eiland (Relating to certain limitations in health benefit plans and health insurance policies.), As Introduced

No significant fiscal implication to the State is anticipated.

The bill would amend the Insurance Code relating to certain limitations in health benefit plans and health insurance policies.

Based on the analysis provided by the Texas Department of Insurance (TDI), it is assumed that any costs associated with the implementation of this bill would be absorbed within existing agency resources. Also based on information provided by TDI, this analysis assumes that implementation of the bill could result in a one-time revenue gain ($27,600 in fiscal year 2012) in General Revenue-Dedicated Texas Department of Insurance Fund 36 from filing fees. Since General Revenue-Dedicated Texas Department of Insurance Fund 36 is a self-leveling account, this analysis also assumes that any additional revenue resulting from the implementation of the bill would accumulate in the account fund balances and that the department would adjust the assessment of the maintenance tax or other fees accordingly in the following year.

Based on the analysis provided by the Teacher Retirement System, the Employees Retirement System, the Texas A&M University System Administration and the University of Texas System Administration, it is assumed that all duties and responsibilities associated with implementing the provisions of the bill could be accomplished by utilizing existing agency resources.

In fiscal years 2014 through 2016, these costs may differ depending on the essential health benefits approved by Health and Human Services per Section 1311 (d) (3) (B) of the Patient Protection and Affordable Care Act of 2010.

Local Government Impact

The bill would prohibit excluding coverage for injuries acquired while an individual is intoxicated or under the influence of narcotics on policies that cover emergency or other medical, hospital or surgical expenses.

Texas Municipal League (TML) reported that the bill is likely to cause a slight increase in cost of coverage but that municipalities, like private employers, can adjust benefits and coverage to stay within budget.

Texas Association of Counties (TAC) reported that most counties' policies don't contain the stated exclusion and therefore would not be affected by the bill. TAC noted that, if a county is self-insured and buys stop-loss or reinsurance from a carrier that has such an exclusion in their contract, the exclusion would apply to costs over the attachment point, typically $50,000 to $250,000. These costs would vary depending on the number of such cases but are not anticipated to be significant.

Source Agencies:

323 Teacher Retirement System, 327 Employees Retirement System, 454 Department of Insurance, 710 Texas A&M University System Administrative and General Offices, 720 The University of Texas System Administration

LBB Staff:

JOB, KJG, MW, CH, JW, KKR