FUND(S):

2180

Sources of Revenue:

Special Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    The purpose of this bill is to freeze PEIA employee premiums for three years.
    
    Passage of this bill will affect premiums for fiscal years 2013 and 2014 as the financial plan for FY-2012 has already been approved. However, it will have a detrimental ramification on the funding mechanism of the Public Employees Insurance Agency (PEIA).
    
    By law the State employee premiums are to represent 20% of the premium revenue and employers are to represent 80%. By freezing one you freeze all premiums. Freezing premiums will reduce forecast premium revenues by $ 227 million.
    
    By law the PEIA Finance Board must maintain a reserve fund for the purposes of offsetting unanticipated claim losses in any fiscal year of 10% Freezing premiums will result in depletion of the PEIA/RHBT reserve of $180 million.
    
    Net Results FY-2013 FY-2014 Total
    PEIA $(22,456,368) $ 2,352,604 $ (20,103,764)
    RHBT $ 32,220,131 $ 34,411,873 $ 66,632,004
     ------------- ------------ -------------
     $ 9,763,763 $ 36,764,477 $ 46,528,240
    Less Premium
    Increases
    State Employer $(58,000,000) $(118,000,000) $(176,000,000)
    State Employee $(18,000,000) $ (33,000,000) $ (51,000,000)
     ------------- -------------- --------------
     $(76,000,000) $(151,000,000) $(227,000,000)
    
    Net Results Without
    Premium Increases $(66,236,237) $(114,235,523) $(180,471,760)



Fiscal Note Detail


Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


    



Memorandum


    



    Person submitting Fiscal Note: Chip Myers
    Email Address: clifford.m.myers@wv.gov