OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

sHB-5075

AN ACT CONCERNING DISABILITY INSURANCE COVERAGE FOR UNIFORMED MEMBERS OF FIRE DEPARTMENTS WHO ARE OTHERWISE INELIGIBLE FOR WORKERS' COMPENSATION BENEFITS FOR CERTAIN TYPES OF CANCER.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 17 $

FY 18 $

The State

Potential Cost

See Below

See Below

Municipal Impact:

Municipalities

Effect

FY 17 $

FY 18 $

All Municipalities

Potential Cost

See Below

See Below

Explanation

The bill may result in a cost to the state, if the state is able to provide the disability insurance policy required by the bill. It is uncertain if the state has the authority to provide such policy, as the state is not the firefighters' employer. In addition, participation in the program for eligible members is voluntary. The average annual premium for a group disability policy in 2013 was $226 per life.1 This average premium may be understated for the population covered by the bill. There are approximately 26,650 firefighters, 22,225 (83%) are volunteers and 4,425 (17%) are career firefighters.2 If 50% of the career firefighters chose to participate, with 100% of premiums paid by the program, the annualized cost would be approximately $500,025. It is uncertain if any volunteer firefighters would participate in the program as disability insurance provides wage replacement only and it is not specified what would be considered wages for this group.

The bill does not specify (1) the terms of the policy (e.g. benefit duration or percentage of wage replacement), (2) what if any other benefits the program may provide, (3) which state agency will administer the program, and (4) who will cover the cost of the premiums or administration of the program. The costs to the state may be mitigated depending on who bears the cost of the premiums and any administrative expenses. There may be a cost to municipalities depending on how the program is implemented and who is responsible for the premiums.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to changes in premiums charged for the program, any increases in administrative expenses, and changes in number of participants.

1 U.S. Group Disability and Group Term Life Market Survey. (2013) Source: http://media.genre.com/documents/surveylhgdgtmarketsum1404-en.pdf

2 Source: Connecticut State Fire Fighters' Association, members as of 2014.