Date Requested:January 13, 2011
Time Requested:05:00 PM
Agency: Public Employees Insurance Agency (PEIA)
CBD Number: Version: Bill Number: Resolution Number:
2011R1565 Introduced HB2177
CBD Subject: FREEZE PEIA PREMIUMS FOR 3 YEARS
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
Over-all effect
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
3. Explanation of above estimates (including long-range effect):
    


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