LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION April 14, 2009 TO: Honorable Vicki Truitt, Chair, House Committee on Pensions, Investments & Financial Services FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB2986 by Phillips (Relating to the participation of certain retired employees of juvenile probation departments in the group benefits plan for state employees.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB2986, As Introduced: a negative impact of ($764,585) through the biennium ending August 31, 2011. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
April 14, 2009
TO: Honorable Vicki Truitt, Chair, House Committee on Pensions, Investments & Financial Services FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB2986 by Phillips (Relating to the participation of certain retired employees of juvenile probation departments in the group benefits plan for state employees.), As Introduced
TO: Honorable Vicki Truitt, Chair, House Committee on Pensions, Investments & Financial Services
FROM: John S. O'Brien, Director, Legislative Budget Board
IN RE: HB2986 by Phillips (Relating to the participation of certain retired employees of juvenile probation departments in the group benefits plan for state employees.), As Introduced
Honorable Vicki Truitt, Chair, House Committee on Pensions, Investments & Financial Services
Honorable Vicki Truitt, Chair, House Committee on Pensions, Investments & Financial Services
John S. O'Brien, Director, Legislative Budget Board
John S. O'Brien, Director, Legislative Budget Board
HB2986 by Phillips (Relating to the participation of certain retired employees of juvenile probation departments in the group benefits plan for state employees.), As Introduced
HB2986 by Phillips (Relating to the participation of certain retired employees of juvenile probation departments in the group benefits plan for state employees.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB2986, As Introduced: a negative impact of ($764,585) through the biennium ending August 31, 2011. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Estimated Two-year Net Impact to General Revenue Related Funds for HB2986, As Introduced: a negative impact of ($764,585) through the biennium ending August 31, 2011.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2010 $0 2011 ($764,585) 2012 ($863,026) 2013 ($974,140) 2014 ($1,099,560)
2010 $0
2011 ($764,585)
2012 ($863,026)
2013 ($974,140)
2014 ($1,099,560)
All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable Savings/(Cost) fromGR Dedicated Accounts994 Probable Savings/(Cost) fromFederal Funds555 Probable Savings/(Cost) fromOther Special State Funds998 2010 $0 $0 $0 $0 2011 ($764,585) ($46,679) ($261,150) ($6,688) 2012 ($863,026) ($52,689) ($294,773) ($7,549) 2013 ($974,140) ($59,473) ($332,725) ($8,521) 2014 ($1,099,560) ($67,130) ($375,564) ($9,618) Fiscal Year Probable Savings/(Cost) fromState Highway Fund6 2010 $0 2011 ($248,345) 2012 ($280,320) 2013 ($316,411) 2014 ($357,149)
Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable Savings/(Cost) fromGR Dedicated Accounts994 Probable Savings/(Cost) fromFederal Funds555 Probable Savings/(Cost) fromOther Special State Funds998 2010 $0 $0 $0 $0 2011 ($764,585) ($46,679) ($261,150) ($6,688) 2012 ($863,026) ($52,689) ($294,773) ($7,549) 2013 ($974,140) ($59,473) ($332,725) ($8,521) 2014 ($1,099,560) ($67,130) ($375,564) ($9,618)
2010 $0 $0 $0 $0
2011 ($764,585) ($46,679) ($261,150) ($6,688)
2012 ($863,026) ($52,689) ($294,773) ($7,549)
2013 ($974,140) ($59,473) ($332,725) ($8,521)
2014 ($1,099,560) ($67,130) ($375,564) ($9,618)
Fiscal Year Probable Savings/(Cost) fromState Highway Fund6 2010 $0 2011 ($248,345) 2012 ($280,320) 2013 ($316,411) 2014 ($357,149)
2010 $0
2011 ($248,345)
2012 ($280,320)
2013 ($316,411)
2014 ($357,149)
Fiscal Analysis
The bill would amend Section 1551.002 of Insurance Code to provide access to Group Benefits Program (GBP) coverage for certain employees of juvenile probation departments (JPDs) retiring on or after September 1, 2009 meeting the following conditions: (1) Employed by a JPD located in a county with a population less than 150,000; (2) Retire on or after September 1, 2009 and have 10 years of creditable service from JPD; (3) Meet all the requirements for retirements from the Texas County and District Retirement System; and (4) The JPD does not provide retired employees access to a health benefit plan, or a plan comparable to the basic plan under the GBP. Additionally, employees not actively employed on August 31, 2009 but who become employed on or after September 1, 2009 must retire from employment on or after September 1, 2019, have at least 10 years of creditable service, and meet the last two requirements listed above. The bill would take effect September 1, 2009, with coverage effective September 1, 2010.
The bill would amend Section 1551.002 of Insurance Code to provide access to Group Benefits Program (GBP) coverage for certain employees of juvenile probation departments (JPDs) retiring on or after September 1, 2009 meeting the following conditions: (1) Employed by a JPD located in a county with a population less than 150,000; (2) Retire on or after September 1, 2009 and have 10 years of creditable service from JPD; (3) Meet all the requirements for retirements from the Texas County and District Retirement System; and (4) The JPD does not provide retired employees access to a health benefit plan, or a plan comparable to the basic plan under the GBP. Additionally, employees not actively employed on August 31, 2009 but who become employed on or after September 1, 2009 must retire from employment on or after September 1, 2019, have at least 10 years of creditable service, and meet the last two requirements listed above.
The bill would take effect September 1, 2009, with coverage effective September 1, 2010.
Methodology
The bill would increase the cost to the state by increasing the number of retirees for whom the state pays for coverage. It is assumed that the state's cost for the JPD retirees would be the same as the average state contribution for each current GBP member. The Employees Retirement System (ERS) reports that the average state contribution for basic coverage for each member is projected to be $5,444 in fiscal year 2009, and will increase annually in accordance with the HealthSelect plan cost trend. This would result in a cost of $1,327,448 in All Funds ($811,264 in General Revenue-related Funds) in fiscal year 2011, the first year coverage goes into effect. ERS reports that there were 8,112 JPD employees in Texas in calendar year 2006, according to the Texas Juvenile Probation Commission. It is assumed that the distribution of JPD employees among counties is similar to the distribution of Texas population among counties. Since 26 percent of the Texas population resides in counties with less than 150,000 residents, it is assumed that the bill would apply to 26 percent of JPD employees in Texas, or approximately 2,109 employees. It is further assumed by ERS that 10 percent of these employees will retire on or after September 1, 2009, and enroll in the GBP on September 1, 2010, which is the effective date of the coverage. The number of JPD retirees covered under the GBP is assumed to increase 5 percent each year.
The bill would increase the cost to the state by increasing the number of retirees for whom the state pays for coverage. It is assumed that the state's cost for the JPD retirees would be the same as the average state contribution for each current GBP member. The Employees Retirement System (ERS) reports that the average state contribution for basic coverage for each member is projected to be $5,444 in fiscal year 2009, and will increase annually in accordance with the HealthSelect plan cost trend. This would result in a cost of $1,327,448 in All Funds ($811,264 in General Revenue-related Funds) in fiscal year 2011, the first year coverage goes into effect.
ERS reports that there were 8,112 JPD employees in Texas in calendar year 2006, according to the Texas Juvenile Probation Commission. It is assumed that the distribution of JPD employees among counties is similar to the distribution of Texas population among counties. Since 26 percent of the Texas population resides in counties with less than 150,000 residents, it is assumed that the bill would apply to 26 percent of JPD employees in Texas, or approximately 2,109 employees. It is further assumed by ERS that 10 percent of these employees will retire on or after September 1, 2009, and enroll in the GBP on September 1, 2010, which is the effective date of the coverage. The number of JPD retirees covered under the GBP is assumed to increase 5 percent each year.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 327 Employees Retirement System
327 Employees Retirement System
LBB Staff: JOB, JRO, MS, DEH
JOB, JRO, MS, DEH