TO: | Honorable Byron Cook, Chair, House Committee on State Affairs |
FROM: | John S O'Brien, Director, Legislative Budget Board |
IN RE: | HB2089 by Smithee (Relating to the resolution of overpayment or underpayment of income benefits under the workers' compensation program.), As Introduced |
Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
---|---|
2012 | $0 |
2013 | $0 |
2014 | $0 |
2015 | $0 |
2016 | $0 |
Fiscal Year | Probable Savings/(Cost) from Interagency Contracts 777 |
---|---|
2012 | $141,648 |
2013 | $142,413 |
2014 | $143,182 |
2015 | $143,955 |
2016 | $144,732 |
The bill would amend the Labor Code relating to the resolution of overpayment or underpayment of income benefits under the workers' compensation program. The bill would allow the commissioner of workers’ compensation to establish procedures to require an overpayment of income benefits to be recouped from future income benefit payments and underpayments to be paid in a future income benefit payment. The bill would require that the procedure include a process for notification to the injured employee of the underpayments and overpayments and a methodology for payment and recoupment by the insurance carrier. The bill would take effect on September 1, 2011.
Based on the analysis by the State Office of Risk Management (SORM), implementation of this bill would result in an estimated savings of $284,061 for the first biennium and $287,137 for the second biennium. SORM has identified overpayments of income benefits to injured workers which are not recoverable under current law but which would be recoverable under this bill. SORM has experienced a 0.54 percent increase per year in the amount of recoverable overpayments, likely due to an increase in the number of active claims. By utilizing the average identified recoverable amount for the last three and one half years and applying a 0.54 percent increase per year, the total anticipated five year recovery is estimated to be $715,930 if the bill is enacted. It is assumed that claims levels and overpayments would remain at current levels.
Based on the analysis provided by the Texas Department of Insurance, the Texas Department of Transportation, University of Texas System Administration and Texas A&M University System, any costs associated with the implementation of the bill could be absorbed within existing agency resources. It is assumed that the duties and responsibilities associated with the Texas Tech University System implementing the provisions of the bill could be accomplished by utilizing existing agency resources.
Source Agencies: | 454 Department of Insurance, 479 State Office of Risk Management, 601 Department of Transportation, 710 Texas A&M University System Administrative and General Offices, 720 The University of Texas System Administration, 768 Texas Tech University System Administration
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LBB Staff: | JOB, KJG, MW, CH, BTA, KKR
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