OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http://www.cga.ct.gov/ofa

sSB-913

AN ACT CONCERNING HEALTH CARE DATA REPORTING AND THE ENROLLMENT OF NONSTATE PUBLIC EMPLOYEES IN THE STATE EMPLOYEE HEALTH PLAN.


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 16 $

FY 17 $

State Comptroller - Fringe Benefits (State Employee and Retiree Health Accounts)

GF, TF - Potential Cost

See Below

See Below

GF & TF = General Fund and Special Transportation Fund

Municipal Impact:

Municipalities

Effect

FY 16 $

FY 17 $

Various Municipalities

Potential Savings

See Below

See Below

Explanation

Sections 1 through 3 do not result in a fiscal impact to the state or municipalities. These sections require municipalities and health insurers to provide certain information to the Office of the State Comptroller (OSC) on the health plans provided for municipal employees and retirees by municipalities and health insurers each year electronically. Under current law, information on municipal health plans is already required to be submitted to municipalities by health plans. Municipalities have the option to provide that information to OSC. It is unclear if the bill's disclosure provisions apply to self-insured municipalities who in accordance with federal law are exempt from state regulations.

Section 3 does not result in a cost to the state or municipalities. This section allows, but does not require, OSC to convene a working group to look at various facets of healthcare impacting the state health plan, including payment reform. OSC is currently part of the State's Innovation Model Program (SIM) in collaboration with other public and private health care providers/payers, which looks at health care issues, including payment reform. OSC is required to report to the general assembly recommendations of any committee.

Section 3 may result in a fiscal impact to the state by allowing OSC to enter into cooperative agreements with various entities, including but not limited to health insurers, health care facilities, and third party administrators. The fiscal impact to the state will depend on the nature and scope of any cooperative agreement and the extent to which it impacts the cost to provide health care by the state.

Sections 4 through 8 require OSC to allow nonstate public employers1 to join the state employee health plan on a pooled experience basis. The bill requires OSC to admit those employers who request all their employees and or retirees to join the plan within three months of application. The OSC may reject any employers who seek to enroll a portion of their employees and/or retirees on the recommendations of the Health Care Cost Containment Committee that a disproportionate share of medical risk will be shifted to the state employee plan. The bill does not specify what a “disproportionate share” is equal to.

The state health plan is currently self-insured, whereby the state pays the cost of claims incurred versus a set premium. Premiums are established for the state employee and retiree health plan based on the medical risk associated with state employees, retirees and their dependents. Allowing nonstate public employers to join the state plan may result in a cost to the state if the premiums established for the state plan and extended to municipalities are less than actual claims incurred for the employer.2 Section 5 of the bill requires OSC to develop procedures which include addressing how premiums made in excess of incurred claims will be refunded to the employer, therefore it is not anticipated there will be a gain to the state in the event premiums are greater than claims. The bill may result in a savings to municipalities if the premiums to join the state plan are less than their current rates.

The bill is not anticipated to result in any additional administrative costs to OSC as the agency currently operates the Partnership Plan on a non-pooled basis for municipalities. It is unclear to what extent the Partnership Plan will continue to operate in addition to the pooled plan created in the bill or if the pooled plan will replace the Partnership Plan. In the event there are administrative expenses related to the plan, the bill allows OSC to charge participating municipalities an administrative fee to cover those costs.

The bill requires the State Employees' Bargaining Agent Coalition's approval before municipalities can be pooled with the state plan.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

1 Nonstate public employers are defined as municipalities or other political subdivisions of the state, including a board of education, quasi-public agency, or public library.

2 The bill requires the premiums for municipalities to be equal to that for state employees (state and employee share) and does not include a reserve built into the premium.