LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION May 14, 2009 TO: Honorable Jane Nelson, Chair, Senate Committee on Health & Human Services FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB4341 by Truitt (Relating to the regulation of discount health care programs by the Texas Department of Insurance; providing penalties.), Committee Report 2nd House, Substituted Estimated Two-year Net Impact to General Revenue Related Funds for HB4341, Committee Report 2nd House, Substituted: a positive impact of $12,909 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
May 14, 2009
TO: Honorable Jane Nelson, Chair, Senate Committee on Health & Human Services FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB4341 by Truitt (Relating to the regulation of discount health care programs by the Texas Department of Insurance; providing penalties.), Committee Report 2nd House, Substituted
TO: Honorable Jane Nelson, Chair, Senate Committee on Health & Human Services
FROM: John S. O'Brien, Director, Legislative Budget Board
IN RE: HB4341 by Truitt (Relating to the regulation of discount health care programs by the Texas Department of Insurance; providing penalties.), Committee Report 2nd House, Substituted
Honorable Jane Nelson, Chair, Senate Committee on Health & Human Services
Honorable Jane Nelson, Chair, Senate Committee on Health & Human Services
John S. O'Brien, Director, Legislative Budget Board
John S. O'Brien, Director, Legislative Budget Board
HB4341 by Truitt (Relating to the regulation of discount health care programs by the Texas Department of Insurance; providing penalties.), Committee Report 2nd House, Substituted
HB4341 by Truitt (Relating to the regulation of discount health care programs by the Texas Department of Insurance; providing penalties.), Committee Report 2nd House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for HB4341, Committee Report 2nd House, Substituted: a positive impact of $12,909 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 HB4341, Committee Report 2nd House, Substituted: a positive impact of $12,909 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 $12,909 2011 $0 2012 $0 2013 $0 2014 $0
2010 $12,909
2011 $0
2012 $0
2013 $0
2014 $0
All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain/(Loss) fromGeneral Revenue Fund1 Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable (Cost) fromInsurance Maint Tax Fees8042 Probable Revenue Gain fromInsurance Maint Tax Fees8042 2010 $134,000 ($121,091) $0 $0 2011 $67,000 ($67,000) ($44,875) $44,875 2012 $67,000 ($67,000) ($44,875) $44,875 2013 $67,000 ($67,000) ($44,875) $44,875 2014 $67,000 ($67,000) ($44,875) $44,875 Fiscal Year Change in Number of State Employees from FY 2009 2010 2.0 2011 2.0 2012 2.0 2013 2.0 2014 2.0
Fiscal Year Probable Revenue Gain/(Loss) fromGeneral Revenue Fund1 Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable (Cost) fromInsurance Maint Tax Fees8042 Probable Revenue Gain fromInsurance Maint Tax Fees8042 2010 $134,000 ($121,091) $0 $0 2011 $67,000 ($67,000) ($44,875) $44,875 2012 $67,000 ($67,000) ($44,875) $44,875 2013 $67,000 ($67,000) ($44,875) $44,875 2014 $67,000 ($67,000) ($44,875) $44,875
2010 $134,000 ($121,091) $0 $0
2011 $67,000 ($67,000) ($44,875) $44,875
2012 $67,000 ($67,000) ($44,875) $44,875
2013 $67,000 ($67,000) ($44,875) $44,875
2014 $67,000 ($67,000) ($44,875) $44,875
Fiscal Year Change in Number of State Employees from FY 2009 2010 2.0 2011 2.0 2012 2.0 2013 2.0 2014 2.0
2010 2.0
2011 2.0
2012 2.0
2013 2.0
2014 2.0
Fiscal Analysis
The bill would amend the Insurance Code to establish the registration and regulation of discount health care programs at the Texas Department of Insurance (TDI). The bill would also amend the Health and Safety Code to repeal the discount health care program registration process through the Texas Department of Licensing and Regulation (TDLR). The bill would require TDI to create the registration process, regulate the programs, and adopt rules to implement this program. The bill would require the discount health care program operator to pay TDI an initial registration fee of $1,000 and an annual renewal fee not to exceed $500. The elimination of the discount health care program registration process at TDLR would take effect on April 1, 2010. The enforcement of the new program at TDI would take effect on April 2, 2010.Except as stated above, the bill would take effect on September 1, 2009.
The bill would amend the Insurance Code to establish the registration and regulation of discount health care programs at the Texas Department of Insurance (TDI). The bill would also amend the Health and Safety Code to repeal the discount health care program registration process through the Texas Department of Licensing and Regulation (TDLR). The bill would require TDI to create the registration process, regulate the programs, and adopt rules to implement this program. The bill would require the discount health care program operator to pay TDI an initial registration fee of $1,000 and an annual renewal fee not to exceed $500.
The elimination of the discount health care program registration process at TDLR would take effect on April 1, 2010. The enforcement of the new program at TDI would take effect on April 2, 2010.Except as stated above, the bill would take effect on September 1, 2009.
Methodology
This analysis assumes revenue collected from discount health care program registration fees would be deposited into General Revenue and that revenues collected from the fees would be used to offset costs for the regulation requirements of the bill. Since TDI is a self-leveling agency, this analysis also assumes the costs to implement the provisions of the bill above amounts collected and deposited to the credit of the General Revenue fund would be covered from fund balances or maintenance tax revenues. Based on analysis provided by TDLR, 34 discount health care programs are currently registered. Preliminary research conducted by TDI indicates that additional discount plans may still be operating without being registered, which would result in an increase in at least 100 more discount health plans due to the implementation of the bill. Implementation of the bill would require an additional 2 FTEs at TDI to create and operate the registration process. For each fiscal year of 2010-14, the 2 FTEs will cost $83,787 in salaries with associated benefits cost of $23,938, and telephone, consumable, and other operating costs of $4,150. Additionally, a one-time equipment cost of $9,216 is anticipated in fiscal year 2010. Since TDLR is statutorily required to cover the costs of its operation from generated fee revenues, this analysis assumes a cost savings of $17,000 each fiscal year in General revenue would offset a corresponding revenue loss of the same amount from renewals for 34 discount health care programs that would not be collected. Accordingly, the overall fiscal implication to TDLR is assumed to be insignificant. Furthermore, it is also assumed that duties and responsibilities for TDLR related to implementing the provisions of the bill could be absorbed within existing resources.
This analysis assumes revenue collected from discount health care program registration fees would be deposited into General Revenue and that revenues collected from the fees would be used to offset costs for the regulation requirements of the bill. Since TDI is a self-leveling agency, this analysis also assumes the costs to implement the provisions of the bill above amounts collected and deposited to the credit of the General Revenue fund would be covered from fund balances or maintenance tax revenues.
Based on analysis provided by TDLR, 34 discount health care programs are currently registered. Preliminary research conducted by TDI indicates that additional discount plans may still be operating without being registered, which would result in an increase in at least 100 more discount health plans due to the implementation of the bill.
Implementation of the bill would require an additional 2 FTEs at TDI to create and operate the registration process. For each fiscal year of 2010-14, the 2 FTEs will cost $83,787 in salaries with associated benefits cost of $23,938, and telephone, consumable, and other operating costs of $4,150. Additionally, a one-time equipment cost of $9,216 is anticipated in fiscal year 2010.
Since TDLR is statutorily required to cover the costs of its operation from generated fee revenues, this analysis assumes a cost savings of $17,000 each fiscal year in General revenue would offset a corresponding revenue loss of the same amount from renewals for 34 discount health care programs that would not be collected. Accordingly, the overall fiscal implication to TDLR is assumed to be insignificant. Furthermore, it is also assumed that duties and responsibilities for TDLR related to implementing the provisions of the bill could be absorbed within existing resources.
Technology
The bill would have a technology impact of $2,888 in fiscal year 2010 to TDI.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 454 Department of Insurance, 452 Department of Licensing and Regulation
454 Department of Insurance, 452 Department of Licensing and Regulation
LBB Staff: JOB, CL, MW, CH
JOB, CL, MW, CH