OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

HB-6221

AN ACT CONCERNING RECOVERY OF PAYMENTS FROM COLLATERAL SOURCES BY A MUNICIPALITY WITH A SELF-INSURED HEALTH PLAN.

As Amended by House "A" (LCO 7826)

House Calendar No.: 359

Senate Calendar No.: 563


OFA Fiscal Note

State Impact: None

Municipal Impact:

Municipalities

Effect

FY 18 $

FY 19 $

Various Municipalities

Potential Revenue Gain

See Below

See Below

Explanation

The bill will result in revenue to self-insured municipalities to the extent that they are able to recover any medical costs incurred on behalf of an injured employee and their covered dependents, paid by the municipality's self-insured policy. The bill is anticipated to result in a revenue gain as opposed to a savings, as any recovery is assumed to be a refund of expenditures already paid. The revenue gain will depend on the amount recovered.

The bill expressly limits the recovery to expenses paid directly from the municipality's own revenue. The municipality is prohibited from recovering for expenses incurred by an insurer who may provide stop-loss coverage for the municipality's self-insured policy. Under the terms of the bill, a municipality is not entitled to recover from a tortfeasor for amounts equal to or less than $15,000.

The amount a municipality can recover is limited by the following: (1) any percentage of comparative negligence (fault) attributed to the employee, (2) the percentage ratio that the employee's legal fees and costs are relative to the total judgement or settlement, and (3) any amounts recovered cannot result in an untoward windfall to the municipality. In addition, the bill requires the municipality to comply with the notice provisions of the bill in order for the municipality to be able to have a lien against any recovery from the tortfeasor.

House “A” struck the underlying bill and its associated fiscal impact and resulted in the impact described herein.

The Out Years

The fiscal impact in the out years will depend on any amount a self-insured municipality is able to recover in accordance with the terms of the bill.