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

SPONSOR M. P. Garcia

ORIGINAL DATE

LAST UPDATED

1/31/07

2/09/07 HB 695/aHLC

SHORT TITLE Small Employer Insurance for Contractors

SB

ANALYST Propst

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Companion to SB 676

Relates to SB 428

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department (HSD)

General Services Department (GSD)

SUMMARY

Synopsis of HLC Amendment

The House Labor and Human Resources Committee amendment changed the definition of small

employer to include: “a person that has a current contract for state business specific to health and

human services programs and employs fewer than an average of six hundred persons over a

twelve-month period."

Synopsis of Original Bill

House Bill 695 adds a definition of small employer that includes: “a person that has a current

contract for state business specific to health and human services programs and employs fewer

than an average of five hundred persons over a twelve-month period."

House Bill 695/aHLC – Page

2

SIGNIFICANT ISSUES

HSD reports that the health care insurance marketplace treats employers with less than 50

employees (small employers) less favorably than employers with greater than 50 employees

(large employers). The intent of the legislation is to assist small employers who have less clout

in the marketplace and not to interfere with the private market for health insurance for large

employers who had more viable options for obtaining commercial health insurance.

PERFORMANCE IMPLICATIONS

HSD reports no performance or administration implications.

OTHER SUBSTANTIVE ISSUES

GSD has been designated as lead agency to study options for state contractors to provide health

care coverage for their employees. The study and a proposed plan are anticipated for completion

by July 2007.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

HB 695, SB 428 and SB 676 expand health care insurance eligibility through SEIP to private

sector employers:

•

HB 695 to health/human services contractors employing an average of less than 500

people, regardless of whether the employer has previously provided health care coverage.

•

SB 428 waives the 12-month waiting period for non-profit employers with an average of

fewer than 50 employees.

•

SB 676 to employers with an average of less than 500 employees who have contracted

with the state within the previous three years.

WEP/csd