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February 10, 2022 SB 22-081
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 22-0541
Sen. Smallwood
Date:
Bill Status:
Fiscal Analyst:
February 10, 2022
Senate SVMA
Annie Scott | 303-866-5851
Annie.Scott@state.co.us
Bill Topic: HEALTH EXCHANGE EDUCATION CAMPAIGN HEALTH -CARE SERVICES
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☒ TABOR Refund
☐ Local Government
☒ Statutory Public Entity
The bill requires the Board of the Colorado Health Benefit Exchange to create and
implement a public awareness and education campaign in order to provide information
to consumers about the Medicaid program and health benefit plans available for
purchase. The bill will decrease state revenue, and increase state workload, and
statutory public entity expenditures and workload on an ongoing basis.
Appropriation
Summary:
No appropriation is required.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under SB 22-081
Budget Year
FY 2022-23
Out Year
FY 2023-24
Revenue General Funds ($2,500,000) ($5,000,000)
Expenditures
- -
Transfers - -
Other Budget Impacts TABOR Refund ($2,500,000) ($5,000,000)
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February 10, 2022 SB 22-081
Summary of Legislation
The bill requires that the Board (board) of the Colorado Health Benefit Exchange (exchange) create
and implement a public awareness and education campaign to inform consumers about the Medicaid
program and available health benefit plans by July 1, 2023. The campaign must include:
the benefit design for each health benefit plan;
the out-of-pocket costs to individuals enrolled in the Medicaid program or a health benefit plan;
the range of costs and eligibility requirements for enrollment in the Medicaid program;
costs to the employer for each small group health benefit plan; and
eligibility requirements for each subsidized health benefit plan.
The board must report to the Colorado Health Insurance Exchange Oversight Committee annually
about the campaign activities in the previous calendar year, details of funds spent, recommendations
concerning the campaign, and whether the duties of the board should continue.
The bill requires that the board collect fees from insurers to fund the campaign, and that if an insurer
does not pay the fee, the insurer's ability to transact business may be withdrawn.
In current law, the Commissioner of Insurance must allocate up to $5.0 million of premium tax credits
per year. The bill increases this to $10.0 million for tax years 2023 through 2027.
The bill requires that the contributions from insurers that were allocated to the first $5.0 million of tax
credits and any interest gained from the deposit and investment of the contributions are used to
operate the exchange and build reserves. Contributions from insurers allocated in excess of the first
$5.0 million of tax credits, and any interest derived from the deposit and investment of the money, are
to be used for the campaign.
The requirements of the bill repeal on December 31, 2027.
Background
Connect for Health Colorado. Connect for Health Colorado is the state's health insurance exchange
established in response to federal health care reform under the Affordable Care Act (ACA). Through
Connect for Health Colorado, consumers can shop for health insurance and determine eligibility for
federal tax subsidies for the purchase of health insurance or other public health programs. Under the
ACA, states may establish state-based health insurance exchanges or participate in a federally
operated health exchange.
State Revenue
The bill reduces General Fund revenue by up to $2.5 million in FY 2022-23 for a half year of collections
and $5.0 million per year in FY 2023-24 through FY 2026-27, and $2.5 million in FY 2027-28, for a total
reduction of $25.0 million. Currently, insurers may claim a credit against their premium taxes, up to
a statewide total of $5.0 million per year and this fiscal note assumes that insurers will claim the new
statewide total of $10.0 million per year. Page 3
February 10, 2022 SB 22-081
State Expenditures
Department of Regulatory Agencies. Due to the increase in insurer fees that are offset by an increase
in tax credits, the bill may increase workload for the Division of Insurance. First, insurers may file
requests up to the new tax credit cap of $10.0 million and depending on the effective date of the bill,
may resubmit their rate filings for 2023 to include the new assessment. Currently two insurers request
the premium tax credits. If new insurers submit requests for premium tax credits, the division will
review their supporting documentation, compare financial documents, and verify calculations. It is
assumed that this workload increase can be accomplished within existing resources.
Health Care Policy and Financing. The department may experience an increase in the number of
persons enrolled in Medicaid due to the campaign. Any caseload increase will be addressed through
the annual budget process.
Other Budget Impacts
TABOR refunds. The bill is expected to decrease the amount of state revenue required to be refunded
to taxpayers by the amounts shown in the State Revenue section above. This estimate assumes the
December 2021 LCS revenue forecast. A forecast of state revenue subject to TABOR is not available
beyond FY 2023-24. Because TABOR refunds are paid from the General Fund, decreased General
Fund revenue will lower the TABOR refund obligation, but result in no net change to the amount of
General Fund otherwise available to spend or save.
Statutory Public Entity Impacts
Connect for Health Colorado. To implement the requirements of this bill, Connect for Health
Colorado will incur a $10,000, one-time cost to set-up the software necessary to collect the health
insurer fee, and an annual cost of $30,000 to administer the software and collect the fee. In addition,
Connect for Health Colorado will run four campaigns focusing on individuals participating and not
participating in the exchange, small group plans, and Medicaid at a cost of $5.0 million each. It is
assumed that the total cost of $20,040,000 in the first year and $20,030,000 in subsequent years will be
covered by the health insurer fee, as described in the bill.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming no
referendum petition is filed.
State and Local Government Contacts
Connect for Health Colorado Health Care Policy and Financing Information
Technology Regulatory Agencies Treasury
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit: leg.colorado.gov/fiscalnotes.