COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:2816H.01I Bill No.:HB 1444 Subject:Insurance - Health; State Employees Type:#Updated Date:April 1, 2025
#To update the fiscal impact for MCHCP.
Bill Summary:This proposal creates provisions relating to an option to opt out of coverage
under the missouri consolidated health care plan and receive an annual
stipend instead.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2026FY 2027FY 2028#General Revenue
Fund
Could exceed
($17,136,000)
Could exceed
($17,136,000)
Could exceed
($17,136,000)
#Total Estimated
Net Effect on
General Revenue
Could exceed
($17,136,000)
Could exceed
($17,136,000)
Could exceed
($17,136,000)
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028
#Other State Funds
Could exceed
($4,080,000)
Could exceed
($4,080,000)
Could exceed
($4,080,000)
#Total Estimated
Net Effect on Other
State Funds
Could exceed
($4,080,000)
Could exceed
($4,080,000)
Could exceed
($4,080,000)
Numbers within parentheses: () indicate costs or losses. L.R. No. 2816H.01I
Bill No. HB 1444
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028#Federal FundsCould exceed
($5,984,000)
Could exceed
($5,984,000)
Could exceed
($5,984,000)
#Total Estimated
Net Effect on All
Federal Funds
Could exceed
($5,984,000)
Could exceed
($5,984,000)
Could exceed
($5,984,000)
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on FTE 000
☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☐ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Local Government$0$0$0 L.R. No. 2816H.01I
Bill No. HB 1444
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FISCAL ANALYSIS
ASSUMPTION
§103.087 – Annual Stipend for opting out of MCHCP coverage
#Officials from the Missouri Consolidated Health Care Plan (MCHCP) assume this bill
creates a provision for employees to opt out of coverage under the Missouri Consolidated Health
Care Plan (MCHCP) and receive an annual stipend for opting out of the coverage.
Fiscal Impact of the Bill:
Employees:
The legislation states that the stipend paid to an employee shall equal fifty percent of the amount
that the state would have paid to contribute toward the cost of the health care coverage for the
individual employee during the relevant calendar year if the employee had enrolled in such
coverage. The amount the state contributes is not a single number and is based on the plan that
the employee chooses. For purposes of this fiscal note, a weighted average for employee only
coverage of $735 per employee per month is used for the calculations for active employees, thus
the subsidy amount is based on $368.
As of January 1, 2025, there are approximately 4,112 eligible active employees who have not
elected coverage under Missouri Consolidated. MCHCP does not auto enroll members in their
coverage. It is assumed that ninety percent, or 3,701 of the employees who currently do not elect
coverage under MCHCP, have coverage elsewhere and would opt in for the annual stipend. This
results in a new cost of $1,361,968 per month, or $16,343,616 annually. The number of
employees who waive coverage fluctuates monthly as employees are hired and leave
employment, so the number of employees annually is typically greater than the number of
employees on any given date.
Offering an incentive to not elect or waive coverage would most likely increase the number of
employees waiving coverage and opting for the incentive. The most likely employees who would
waive coverage are those with low overall expected utilization. Based on claims, MCHCP’s
actuary estimated that anywhere from an additional 3% to 20% of employees may opt out, but
since this bill contains a requirement to show proof of other coverage, it will be on the lower end.
MCHCP has assumed 7% additional waivers at a cost of $9.1 million. L.R. No. 2816H.01I
Bill No. HB 1444
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Original
Opt-outsOpt-Out %
Opt-Outs with
Other Coverage
Incentive
Cost*Plan Savings*
Net (Cost) /
Savings*
1,0143.00%913$4.0$0.0-$4.02,3667.00%2,129$9.4$0.3-$9.13,38010.00%3,042$13.4$1.1-$12.45,07015.00%4,563$20.1$3.8-$16.46,76020.00%6,084$26.8$8.4-$18.4*Numbers in Millions
In addition, as employees who are low utilizers opt out of coverage the average cost per member
would increase, due to adverse selection leading to an increasing medical trend above and
beyond the market trend of 6-8%. As the premium costs for coverage increases, the waiver
incentive given to those who waive coverage would experience a corresponding increase.
For 2025, the State’s projected medical and prescription drug claims are approximately $470
million for the active population. Assuming opt-out percentages with corresponding projected
claims shown in the above, premiums for remaining participants would be impacted as follows
(note that these increases would be in addition to market trend rates):
Opt-out %
Projected Med
/ Rx Claims in
2025
Projected
Contracts
Projected Per
Capita Cost
Projected
Premium Increase
0.00%$470,000,00033,800$1,1590%3.00%$470,000,00032,786$1,1953%7.00%$469,695,80031,434$1,2457%10.00%$468,935,30030,420$1,28511%15.00%$466,231,30028,730$1,35217%20.00%$461,583,80027,040$1,42323%
The increase in the premiums could result in an increase in the amounts paid out by $1.8 million.
Retirees:
The language of the legislation does not refer to retirees, therefore it is assumed that retirees are
not covered under this program.
Overall Fiscal Impact:
For actives employees, the estimated cost is unknown but greater than $27.2 million ($16.3 +
$9.1 + $1.8). MCHCP currently does not receive any state contribution for eligible members who
waive coverage, therefore this would be an additional cost to our current funding. This amount
also would tend to grow annually as the cost of coverage increases due to market trend. L.R. No. 2816H.01I
Bill No. HB 1444
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In addition, state employees would experience an increase in individual premiums unknown but
potentially greater than $95 annually per employee due to the adverse selection principle.
Oversight does not have any information to the contrary. Therefore, Oversight will reflect the
following to the General Revenue Fund, Other State Funds and Federal Funds.
#General Revenue - $17,136,000 (63%)
#Federal Funds - $5,984,000 (22%)
#Other State Funds - $4,080,000 (15%)
#Total - $27,200,000 (100%)
Officials from the Office of Administration and the Missouri State Employee's Retirement
System each assume the proposal will have no fiscal impact on their respective organizations.
Oversight does not have any information to the contrary. Therefore, Oversight will reflect a zero
impact in the fiscal note for these agencies.
Oversight does not have any information to the contrary. Therefore, Oversight will reflect a zero
impact in the fiscal note. L.R. No. 2816H.01I
Bill No. HB 1444
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FISCAL IMPACT – State GovernmentFY 2026
(10 Mo.)
FY 2027FY 2028GENERAL REVENUE FUND#Cost – MCHCP
Annual Stipend (§103.087)
Could exceed
($17,136,000)
Could exceed
($17,136,000)
Could exceed
($17,136,000)
#ESTIMATED NET EFECT TO
THE GENERAL REVENUE FUND
Could exceed
($17,136,000)
Could exceed
($17,136,000)
Could exceed
($17,136,000)
FEDERAL FUNDS#Cost – MCHCP
Annual Stipend (§103.087)
Could exceed
($5,984,000)
Could exceed
($5,984,000)
Could exceed
($5,984,000)
#ESTIMATED NET EFECT TO
FEDERAL FUNDS
Could exceed
($5,984,000)
Could exceed
($5,984,000)
Could exceed
($5,984,000)
OTHER STATE FUNDS#Cost – MCHCP
Annual Stipend (§103.087)
Could exceed
($4,080,000)
Could exceed
($4,080,000)
Could exceed
($4,080,000)
#ESTIMATED NET EFECT TO
OTHER STATE FUNDS
Could exceed
($4,080,000)
Could exceed
($4,080,000)
Could exceed
($4,080,000)
FISCAL IMPACT – Local GovernmentFY 2026
(10 Mo.)
FY 2027FY 2028$0$0$0
FISCAL IMPACT – Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal. L.R. No. 2816H.01I
Bill No. HB 1444
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FISCAL DESCRIPTION
#This bill allows State employees eligible for state health care coverage to opt out of the health
insurance and receive an annual stipend equal to 50% of the amount the State would have
contributed to the individual's health coverage. The stipend amount doesn't include contributions
for spouses or dependents and is considered taxable income. If an employee opts out of the
health insurance, the employee must provide proof that the employee is currently covered by a
separate health insurance plan.
If any relevant period in which the employee is forgoing health care coverage is less than a full
calendar year, the stipend will be prorated. These provisions do not apply to dental or vision
benefits.
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space.
SOURCES OF INFORMATION
Office of Administration
Missouri Consolidated Health Care Plan
Missouri State Employee's Retirement System
Julie MorffJessica HarrisDirectorAssistant DirectorApril 1, 2025April 1, 2025