FISCAL NOTE

Date Requested: February 11, 2016
Time Requested: 02:10 PM
Agency: Public Employees Insurance Agency (PEIA)
CBD Number: Version: Bill Number: Resolution Number:
1361 Amendment HB4272
CBD Subject: Courts


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 increase the hourly rate for attorneys providing Public Defender Services for in court and out of court work. The bill permits attorneys who spend at least sixty percent of their practice in appointed cases to enroll in the Public Employees Insurance Agency plans and requires the Executive Director of the Public Defender Services to propose rules, for legislative approval, that relate to requirements to enroll in the public employees insurance act.
    
     The bill indicates the attorneys be considered employees of the state for purposes of eligibility. This causes concern for PEIA as the attorneys referenced in the bill aren’t employees of the state, nor employees of a Public Defender Corporation. They are private attorneys contracted with the respective court. Allowing non employees to enroll in PEIA is non-compliant with §5-16 of the Code of West Virginia.
    
     Beyond the non-compliance previously referenced, 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, as PEIA is assuming they would be employed by the Public Defender Corporations. There would be cost increases, however to various employees who participate in the PEIA Non-State Risk Pool. The cost of premiums would be borne by the attorneys and, most likely, the respective Public Defender Corporation, 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%.
    
     There is a 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 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 attorneys would enroll. PEIA has estimated a range of projected cost. The estimated premium cost range to Public Defender Corporations, if 140 attorneys enrolled and were contributing the same premium cost share as current similarly situated insureds based on the assumption of 70% single and 30% family participation is $769,217 to 1,230,335 in FY '17. With a 7% medical cost trend in future years it would increase as follows:
    
    YE 2018-Plan A YE 2019-Plan A YE 2020-Plan A
     $1,316,457.92 $1,408,609.98 $1,507,212.67
    
    
    YE 2018-Plan C YE 2019-Plan C YE 2020-Plan C
     $823,062.43 $880,676.80 $942,324.18
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2016
Increase/Decrease
(use"-")
2017
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: Jason Haught
    Email Address: jason.a.haught@wv.gov