LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION May 20, 2009 TO: Honorable Joe Straus, Speaker of the House, House of Representatives 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. ), As Passed 2nd House Estimated Two-year Net Impact to General Revenue Related Funds for HB4341, As Passed 2nd House: an impact of $0 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 20, 2009
TO: Honorable Joe Straus, Speaker of the House, House of Representatives 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. ), As Passed 2nd House
TO: Honorable Joe Straus, Speaker of the House, House of Representatives
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. ), As Passed 2nd House
Honorable Joe Straus, Speaker of the House, House of Representatives
Honorable Joe Straus, Speaker of the House, House of Representatives
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. ), As Passed 2nd House
HB4341 by Truitt (Relating to the regulation of discount health care programs by the Texas Department of Insurance; providing penalties. ), As Passed 2nd House
Estimated Two-year Net Impact to General Revenue Related Funds for HB4341, As Passed 2nd House: an impact of $0 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, As Passed 2nd House: an impact of $0 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 $0 2012 $0 2013 $0 2014 $0
2010 $0
2011 $0
2012 $0
2013 $0
2014 $0
All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain fromDept Ins Operating Acct36 Probable (Cost) fromDept Ins Operating Acct36 Probable Revenue Gain fromInsurance Maint Tax Fees8042 Probable (Cost) 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 fromDept Ins Operating Acct36 Probable (Cost) fromDept Ins Operating Acct36 Probable Revenue Gain fromInsurance Maint Tax Fees8042 Probable (Cost) 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 to be deposited in the TDI Operating Account 36. 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 to be deposited in the TDI Operating Account 36.
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
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. Revenue collected from discount health care program registration fees would be deposited into Texas Department of Insurance Operating Account 36 and 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 assumes the costs to implement the provisions of the bill above amounts collected and deposited to the credit of the Texas Department of Insurance Operating Account 36 fund would be covered from fund balances or maintenance tax revenues. 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.
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.
Revenue collected from discount health care program registration fees would be deposited into Texas Department of Insurance Operating Account 36 and 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 assumes the costs to implement the provisions of the bill above amounts collected and deposited to the credit of the Texas Department of Insurance Operating Account 36 fund would be covered from fund balances or maintenance tax revenues.
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