LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION April 28, 2009 TO: Honorable Robert Duncan, Chair, Senate Committee on State Affairs FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:SB485 by Deuell (Relating to medical loss ratios of health benefit plan issuers.), Committee Report 1st House, Substituted Estimated Two-year Net Impact to General Revenue Related Funds for SB485, Committee Report 1st House, Substituted: 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
April 28, 2009
TO: Honorable Robert Duncan, Chair, Senate Committee on State Affairs FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:SB485 by Deuell (Relating to medical loss ratios of health benefit plan issuers.), Committee Report 1st House, Substituted
TO: Honorable Robert Duncan, Chair, Senate Committee on State Affairs
FROM: John S. O'Brien, Director, Legislative Budget Board
IN RE: SB485 by Deuell (Relating to medical loss ratios of health benefit plan issuers.), Committee Report 1st House, Substituted
Honorable Robert Duncan, Chair, Senate Committee on State Affairs
Honorable Robert Duncan, Chair, Senate Committee on State Affairs
John S. O'Brien, Director, Legislative Budget Board
John S. O'Brien, Director, Legislative Budget Board
SB485 by Deuell (Relating to medical loss ratios of health benefit plan issuers.), Committee Report 1st House, Substituted
SB485 by Deuell (Relating to medical loss ratios of health benefit plan issuers.), Committee Report 1st House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for SB485, Committee Report 1st House, Substituted: 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 SB485, Committee Report 1st House, Substituted: 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 fromInsurance Maint Tax Fees8042 Probable (Cost) fromInsurance Maint Tax Fees8042 Change in Number of State Employees from FY 2009 2010 $167,380 ($167,380) 2.0 2011 $78,299 ($78,299) 1.0 2012 $78,299 ($78,299) 1.0 2013 $78,299 ($78,299) 1.0 2014 $78,299 ($78,299) 1.0
Fiscal Year Probable Revenue Gain fromInsurance Maint Tax Fees8042 Probable (Cost) fromInsurance Maint Tax Fees8042 Change in Number of State Employees from FY 2009 2010 $167,380 ($167,380) 2.0 2011 $78,299 ($78,299) 1.0 2012 $78,299 ($78,299) 1.0 2013 $78,299 ($78,299) 1.0 2014 $78,299 ($78,299) 1.0
2010 $167,380 ($167,380) 2.0
2011 $78,299 ($78,299) 1.0
2012 $78,299 ($78,299) 1.0
2013 $78,299 ($78,299) 1.0
2014 $78,299 ($78,299) 1.0
Fiscal Analysis
The bill would amend the Insurance Code to require preferred provider benefit plans to annually report their medical loss ratio with the Texas Department of Insurance (TDI). The bill would require TDI to include this information on the agencys website and to adopt rules to implement the provisions of the bill. The bill would take effect on September 1, 2009.
The bill would amend the Insurance Code to require preferred provider benefit plans to annually report their medical loss ratio with the Texas Department of Insurance (TDI). The bill would require TDI to include this information on the agencys website and to adopt rules to implement the provisions of the bill. The bill would take effect on September 1, 2009.
Methodology
It is assumed that TDI would design and implement a process to annually collect, verify, and store the loss ratio data, which would require 0.5 full-time-equivalent positions (FTEs) for a research specialist and another 0.5 FTE for an actuary to develop the system in fiscal year (FY) 2010. Additionally, to review and continue to run the data collection, TDI would require 1.0 FTE in each fiscal year from 2010 to 2014. In FY 2010, the 2 FTEs would cost $124,988 for salaries, with $35,709 in associated benefits; $2,075 for telephone, consumables, and other operating expenses; and $4,608 for one-time equipment expenses. In each fiscal year from 2011 to 2014, the 1 FTE would cost $59,286 for salaries with $16,938 in associated benefits and $2,075 for telephone, consumables and other operating expenses.Since TDI is required to generate revenues equivalent to its costs of operation under current law, this analysis assumes that all costs incurred would be paid from General Revenue-8042 Insurance Maintenance Taxes from either existing fund balances or insurance maintenance tax revenues.
It is assumed that TDI would design and implement a process to annually collect, verify, and store the loss ratio data, which would require 0.5 full-time-equivalent positions (FTEs) for a research specialist and another 0.5 FTE for an actuary to develop the system in fiscal year (FY) 2010. Additionally, to review and continue to run the data collection, TDI would require 1.0 FTE in each fiscal year from 2010 to 2014. In FY 2010, the 2 FTEs would cost $124,988 for salaries, with $35,709 in associated benefits; $2,075 for telephone, consumables, and other operating expenses; and $4,608 for one-time equipment expenses. In each fiscal year from 2011 to 2014, the 1 FTE would cost $59,286 for salaries with $16,938 in associated benefits and $2,075 for telephone, consumables and other operating expenses.Since TDI is required to generate revenues equivalent to its costs of operation under current law, this analysis assumes that all costs incurred would be paid from General Revenue-8042 Insurance Maintenance Taxes from either existing fund balances or insurance maintenance tax revenues.
Technology
The bill would have a technology impact of $1,444 in fiscal year 2010.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 454 Department of Insurance
454 Department of Insurance
LBB Staff: JOB, KJG, MW, CH
JOB, KJG, MW, CH