Date Requested: January 16, 2015
Time Requested: 11:30 AM
Agency: Public Employees Insurance Agency (PEIA)
CBD Number: Version: Bill Number: Resolution Number:
2296 Introduced HB2170
CBD Subject: Insurance


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 include volunteer firefighters within the Public Employees Insurance Act and to require the county commissions to pay either three-fourths or the full amount of their premiums.
    
     Passage of this bill would not increase any cost directly to the Public Employees Insurance Agency (PEIA). The agency would have to pass-through the costs to the employers and employees in the Non-State Risk Pool. There would be significant cost however, to the respective County Commissions and to the other employers, and the various employees who participate in the PEIA Non-State Risk Pool. The cost of premiums would be borne by the volunteer firefighter and the respective County Commission, who would be considered the employer. At the present time the PEIA bills county commissions, municipalities and other political subdivisions 100% of the monthly premium for their employees. The respective individual county commissions, municipalities and other political subdivisions can presently dictate what percentage of premiums they will pay as the employer with the employee contributing the balance. This can be anything from zero per cent to 100%.
    
     At the current time there are approximately 11,000 volunteer firefighters in the state of WV. An assumption is being made that approximately 1,000 volunteer firefighters are currently already covered under PEIA, or another plan, or under their spouse‚Äôs plan, leaving 10,000 as a potential number of firefighters that would be eligible to newly enroll in the PEIA Plan.
    
     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 PEIA Plan would experience significantly higher claim utilization if this occurs. This would result in higher medical claim costs which would drastically skew the claim experience for a relatively small PEIA Non-State insured pool. The degree and expense of Adverse Selection would be difficult to calculate without more data. Therefore, the numbers below do not include the costs of Adverse Selection. Such costs could, however, be significant.
    
    It is difficult to determine in what rate plan volunteer firefighters would enroll. PEIA has estimated a range of projected cost. The estimated premium cost range to County Commissions, and other participants in the PEIA Non-State risk pool of 10,000 enrollees, if volunteer firefighters were contributing the same premium cost share as current similarly situated insureds based on the assumption of 70% single and 30% family participation with a 5% medical cost trend is as follows:
     Non-State Plan A Non-State Plan C
     FY-2016 $ 84,873,600 FY-2016 $ 53,109,000
     FY-2017 $ 89,117,280 FY-2017 $ 55,764,450
     FY-2018 $ 93,573,144 FY-2018 $ 58,552,673
     Total $ 267,564,024 Total $ 167,426,123
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2015
Increase/Decrease
(use"-")
2016
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: