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.
The purpose of this bill is to provide health and life insurance coverage to Crime Watch Members that are duly organized under the auspices of the National Crime Prevention Council.
The bill allows Crime Watch Members to enroll in the PEIA health and life insurance plans with the costs of the premiums to be covered entirely by the State. It is our assumption that the reference to the State paying means that the cost would come directly from the General Fund.
In attempting to put together this fiscal note, PEIA was unable to accertain the number of Crime Watch Members that are in WV so an exact acturial estimate was not possible. The PEIA will apply the a number 5,000 of volunteer Crime Watch Members, the same amount that was used for estimates related to WV volunteer fire fighters.
The present cost for life insurance is $0.512 per $1,000.00 of coverage. The required $25,000.00 per member would result in an approximate annual expenditure of $768,000.00 per year. This expenditure will increase periodically as the premium rate is adjusted to counter high loss ratios in the life insurance risk pool.
Since the bill allows the Crime Watch Member to enroll his/her family in the PEIA health insurance plan with the premium being paid for by the State, then it can be expected that all Crime Watch Members will enroll their families. Based upon this assumption the first year expenditure for a population of 5,000 for health insurance coverage would be approximately $ 52,530,000.00 the first year. The health insurance premiums are expected to trend upwards at approximately 10% over the next 3 years resulting in an annual increase to this expenditure.
It is also likely that with the State paying the full cost of the health care and life insurance premium there would be a strong adverse selection resulting in the coming years. Because the enrollment as a Crime Watch Member would not be very difficult and is a part-time position many person that are presently paying for health care and life insurance, or do not have any insurance, would enroll. This would be especially be true for persons that have difficulty obtaining health care coverage at a reasonable cost due to pre-existing conditions or chronic health concerns.
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 |
53,298,000 |
58,551,000 |
64,361,000 |
| 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 |
53,298,000 |
58,551,000 |
64,361,000 |
Explanation of above estimates (including long-range effect):
An estimate of the present enrollment in the Crime Watch program was based upon the volunteer estimates the PEIA uses for volunteer fire fighters. The number may be much greater or lower than the 5,000 used in this estimate. Because of the nature and purpose of the Crime Watch program it was estimated that 75% of the membership would require family health care insurance coverage.
Memorandum
Since the health and life insurance coverage for this program is totally paid by the State of West Virginia there is a strong incentive for individuals and families to enroll in the Crime Watch program solely for the insurance. Employed individuals that must pay a share of their health insurance premium would be inclined to drop their employer's group coverage and perform the part-time duties of this program for the free coverage. The uninsured or under-insured individual would also be prone to enroll as a Crime Watch member for this benefit. Since the bill does not limit the benefit to those without insurance coverage the rapid growth of enrollment in the Crime Watch program, and the subsequent growth in premium costs for these members, is very likely.
Person submitting Fiscal Note: J. Michael Adkins, Deputy Director
Email Address: michael.adkins@wv.gov