|Date Requested:January 20, 2011
Time Requested:03:32 PM
| FUND(S) |
Sources of Revenue
Legislation creates:A New Program
Effect this measure will have on costs and revenues of state government.
| This bill permits qualified volunteer firefighters to be covered by the state’s public health insurance plan. The bill also adds “volunteer firefighter” to the definition of employee and “volunteer fire company” to the definition of employer, and permits the payment of the employer’s portion of the costs relating to the plan to be paid from funds available to volunteer fire companies.
Passage of this bill would not increase any cost directly to the Public Employees Insurance Agency (PEIA). The cost of premiums will be borne by the volunteer fire company that serves as the employer.
At the current time there are approximately 11,000 volunteer firefighters in the state of WV. An assumption is being made that 1,000 volunteer firefighters are currently covered under PEIA or another plan by their spouse leaving 10,000 as a potential number that would be eligible to enroll in the program.
It should be noted that there is a significant potential for adverse selection with passage of this legislation. Adverse selection dictates that only those individuals that need or require medical services will be the ones to take advantage of the program. The insurance program would experience higher claim utilization if this occurs that would result in higher medical claim costs that would drastically skew the claim experience for a relatively small insured pool. In this light the PEIA would recommend that eligibility be restricted to those volunteer firefighters who have served a certain period of time in the service of a volunteer fire department. A sufficient time would be at least one if not two years of service prior to enrollment. This would reduce the possible adverse selection that may occur by persons volunteering to receive insurance coverage and once their immediate medical needs are satisfied leaving the volunteer fire department or cancelling coverage altogether.
The estimated potential cost to county commissions, of 10,000 enrollees, if volunteer firefighters were contributing the current premium cost share as similarly situated insured based on 70% single and 30% family with a 10% medical cost trend is as follow:
|Effect of Proposal||Fiscal Year|
|1. Estmated Total Cost||0||0||0|
|Repairs and Alterations||0||0||0|
|2. Estimated Total Revenues||0||0||0|
3. Explanation of above estimates (including long-range effect):