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F I S C A L I M P A C T R E P O R T

SPONSOR Grubesic

DATE TYPED 02/09/05 HB

SHORT TITLE Amend Retiree Health Care Act

SB 340

ANALYST Geisler

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

See Narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

See Narrative

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

New Mexico Retiree Health Care Authority (RHCA)

SUMMARY

Synopsis of Bill

Senate Bill 340 would add “domestic partner” as a new class of eligible retirees, with the same

rights and benefits as a spouse, and defines domestic partnership. Persons enrolling under this

class would be required to execute an affidavit of domestic partnership.

Senate Bill 340 -- Page 2

Significant Issues

Other employer sponsors such as the State of New Mexico and the City of Albuquerque

currently cover domestic partners, but when those employees retire, they must drop their partners

from coverage under the RHCA. This would allow them to continue coverage.

FISCAL IMPLICATIONS

RHCA estimates a total net cost of $1.5 million in FY 06 to the retiree health care fund from

adding domestic partners to the RHCA program. Adding additional members would cause a

1-2% increase in medical claims at a cost of approximately $3 million, but this cost would be

offset by increase premium revenue from retired members of approximately $1.5 million. These

costs and revenues are recurring and would increase over time.

ADMINISTRATIVE IMPLICATIONS

Adding more members would require a slight increase in staff time for enrollments and other ser-

vices

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

Domestic partners will continue to have to find coverage outside of a state sponsored plan when

their partner retires from the state.

GG/njw