FISCAL NOTE



FUND(S):

2180

Sources of Revenue:

Special Fund

Legislation creates:

A New Program



Fiscal Note Summary


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 employee health insurance plan (PEIA). The bill adds “volunteer firefighter” to the definition of employee and “volunteer fire company” to the definition of employer. The bill also directs the payment of the employer’s portion of the PEIA premium to the county commission. The county commission will be responsible for either three-fourths or the full amount of the premium. Allowing the access of volunteer firefighter to the WV Public Employees Insurance Agency health and drug insurance plan will not result in any direct increase of costs to the PEIA. The cost of premiums will be paid either as a combination of employer and employee sharing or entirely by the responsible county commission. PEIA may have to perform some administrative duties in the establishment of a separate premium table for firefighters based upon the experience of their insurance pool and to coordinate a large statewide enrollment, but this is within the normal course of business for the agency. While there is no direct cost to the WV PEIA the agency did determine the estimated cost to the county commissions should this bill pass. The expected aggregate premium costs are as follows: 75% of Premium 100% of Premium FY2010 $ 11,550,000 $ 14,440,000 FY2011 $ 13,052,000 $ 16,318,000 FY2012 $ 14,227,000 $ 17,790,000



Fiscal Note Detail


Effect of Proposal Fiscal Year
2009
Increase/Decrease
(use"-")
2010
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):


The PEIA requested it contracted actuary firm, CCRC Actuaries, to provide estimates of premium costs should the volunteer fire fighters be allowed to enter the PEIA Plan. This was done to be able to inform the various stakeholders of the possible costs that would be applied to them in the event this bill should be enacted. The exact number of fire fighters in WV was not known but there are approximately 825,000 volunteer fire fighters in the United States making it probable that WV would have approximately 5,000 volunteer fire fighters based upon its population. Since the bill provides for a large portion or all of the premium to be paid by the county commission it was generally believed that almost all of those persons eligible to receive this benefit would enroll in PEIA. The subsequent year increases applied to the expected premium costs were taken from the PEIA Five Year Financial Plan. The non-state, local risk pool (fund) is projected to see premium increases of 8% in FY2010; 13% in FY2011; and 9% in FY2012.



Memorandum


The only recommendation that PEIA may make on this bill is that the eligibility should be restricted to those volunteers who have served a certain period of time as certified volunteer fire fighter. PEIA would recommend that at least a year of service occur prior to enrollment. This requirement would reduce any possible adverse selection that may occur by having persons volunteering primarily to receive health care coverage for specific medical needs for themselves or their families and once their medical concerns are resolved leaving the volunteer fire company. Since the risk pool for the volunteer fire fighters will not be large it would only take a few persons taking advantage of this situation to obtain complex and expensive medical procedures to result in a substantial increase in premiums.



    Person submitting Fiscal Note: J. Michael Adkins, Deputy Director
    Email Address: michael.adkins@wv.gov