Colorado Legislative Council Staff



Drafting Number:

Prime Sponsor(s):

LLS 99-0294

Sen. Thiebaut

Rep. Tapia


Bill Status:

Fiscal Analyst:

January 30, 1999

Senate HEWI

Janis Baron (303-866-3523)



Fiscal Impact Summary

FY 1999/2000

FY 2000/2001

State Revenues

General Fund



State Expenditures

General Fund

Cash Fund

Federal Fund

$ 168,223



$ 223,984



FTE Position Change

1.1 FTE

0.3 FTE

Other State Impact: None

Effective Date: July 1, 1999 — Applies to health benefit plan polices and contracts entered into or renewed on or after that date.

Appropriation Summary for FY 1999-2000:

Department of Regulatory Agencies

    Cash Funds$ 50,463


Department of Public Health and Environment

   General Fund$ 145,424

Department of Health Care Policy and Financing

   Total$ 65,328

   General Fund 22,799

   Federal Funds42,529

Local Government Impact: The bill may result in increased health care premiums for local governments in their role as employers.

Summary of Legislation

            The bill includes a number of provisions relative to the rights of health insurance policy beneficiaries. This fiscal note is limited to discussion of those provisions of the bill which create a fiscal impact.

State Expenditures

            Although a number of the bill's requirements can be fulfilled within existing appropriations, there will be a total need for $261,215 additional funding in FY 1999-00; and $293,558 in FY 2000-01 to comply with SB 99-87. The bill creates a fiscal impact in the Departments of Regulatory Agencies, Public Health and Environment, and Health Care Policy and Financing. The narrative below provides a brief discussion of the respective funding requirements for the affected departments.

            Department of Regulatory Agencies, Division of Insurance. The department will require $50,463 and 1.1 FTE in FY 1999-00, and $13,455 and 0.3 FTE in FY 2000-01. Year one requirements of the bill will impact workload accordingly: implement required external review process; amend regulations; train staff on changes; respond to consumer inquiries; perform in-house examinations; and review rates and form filings. Year two requirements will be dedicated to in-house examinations only.

            Department of Public Health and Environment. The department will require $145,424 in FY 1999-00, and $193,898 in FY 2000-01. Section 10-16-130 of the bill directs the department to create an Ombudsman Program, either directly or through contract, to provide consumer assistance regarding choice among health benefit plans, and to provide counseling and assistance to covered persons and enrollees dissatisfied with services. The department indicates it will contract out the Ombudsman Program functions. Costs for FY 1999-00 are less than FY 2000-01 because it is estimated that it will take three months to enter into a contract with the contract agency. Thus, FY 1999-00 costs reflect only nine months of operation.

            Department of Health Care Policy and Financing. The department will require $65,328 in FY 1999-00, and $86,205 in FY 2000-01. The department indicates that the bill will result in increases in health plan premiums for the Children's Basic Health Plan. The department's estimates on premium increases are based on a study by the Congressional Budget Office, a study conducted by Price Waterhouse for Kaiser Permanente on obstetrical/gynecological service providers, and actual enrollment in the Children's Basic Health Plan. Sections of the bill and corresponding premium increases are noted below:


               Section 10-16-128 (1) — 0.15 percent increase in premiums

               Section 10-16-128 (2) — 0.02 percent increase in premiums

               Section 10-16-135 — 0.05 percent increase in premiums

            Department of Personnel. SB 98-51, Concerning Mandated Insurance Coverages for State Employees, requires the executive director of the Department of Personnel to provide a financial impact statement to the legislative committee of reference for any proposed mandated coverage that relates to either the state's share of the employee benefit premium or the state employee's share of the premium (Section 10-16-104, C.R.S.). At this time, the Department of Personnel indicates that any increase in premiums resulting from this legislation will be borne by state employees; the bill was not referred by the Employee Benefits Unit for an actuarial analysis.

Local Government Impact

            The bill may result in increased health care premiums for local governments in their role as employers.


State Appropriations

            The fiscal note indicates the following appropriations are required in FY 1999-00:


               Department of Regulatory Agencies — $50,463 cash funds from the Division of Insurance Cash Fund and 1.1 FTE

               Department of Public Health and Environment — $145,424 General Fund

               Department of Health Care Policy and Financing — $65,328 Total. The appropriation should be comprised of the following: $22,799 General Fund to the Children's Basic Health Plan Trust Fund (CBHPTF); $22,799 cash funds exempt transfer from the CBHPTF to the department; and $42,529 federal funds.

Departments Contacted

            Health Care Policy and Financing


            Public Health and Environment

            Regulatory Agencies