LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6660 NOTE PREPARED: Jan 10, 2024
BILL NUMBER: HB 1420 BILL AMENDED:
SUBJECT: Contraceptive Coverage.
FIRST AUTHOR: Rep. Errington BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
XFEDERAL
Summary of Legislation: The bill requires a state employee health plan (SEHP), a policy of accident and
sickness insurance, and a health maintenance organization contract to provide coverage, without cost sharing,
for:
(1) contraceptive products and services;
(2) counseling and screening for certain sexually transmitted infections; and
(3) pre-exposure prophylaxis, post-exposure prophylaxis, and human papillomavirus
vaccination.
Effective Date: July 1, 2024.
Explanation of State Expenditures: The bill requires coverage of contraceptive products and services
without cost-sharing, resulting in the state paying the members’ share of costs which will likely increase
premiums. The resulting increase in SEHP premiums may be mitigated with adjustments to other benefits
or to employee compensation packages. Some requirements of the bill may be further mitigated by female
contraceptive care being included as a preventative care measure under federal policy. [See Explanation of
State Revenues.]
Explanation of State Revenues: Insurance Premium Tax Revenue: If premium collections in the state
increase as the result of limitations on cost-sharing for contraceptive products and services, revenue to the
state General Fund from the corporate Adjusted Gross Income Tax and the Insurance Premium Tax would
increase.
High Deductible Health Plans (HDHP): Generally, a HDHP may not provide a benefit for the insured until
HB 1420 1 the full amount of the covered individual’s deductible has been paid. The federal Internal Revenue Service
(IRS) has ruled that a health plan that provides benefits for male sterilization or male contraceptives before
satisfying the minimum deductible does not constitute an HDHP. The bill provides that cost sharing
requirements are to be set to the minimum level available that avoids disqualification. [The IRS disqualifying
a HDHP also disqualifies any tax deductible contributions to a Health Savings Account under the HDHP.
Disqualifying Health Savings Account contributions would result in increased revenue to the state General
Fund through disqualification of the tax deductible status of the contributions.]
Explanation of Local Expenditures: Local entities providing health insurance through the state health plan,
a policy of accident and sickness, or a health maintenance organization may have increased premiums to
cover member cost share of these products and services.
Explanation of Local Revenues:
State Agencies Affected: All.
Local Agencies Affected: Local entities providing health care insurance.
Information Sources: IRS Notice 2018-12 & 2013-57;
https://healthlaw.org/wp-content/uploads/2021/12/CE-Tax-Law-12082021-final.pdf.
Fiscal Analyst: Karen Rossen, 317-234-2106.
HB 1420 2