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

SPONSOR Beffort

ORIGINAL DATE

LAST UPDATED

2/15/07

2/28/07 HB

SHORT TITLE Smoking Policy for Small Employer Insurance

SB 663/aSPAC

ANALYST Earnest

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Public Regulation Commission (PRC)

Human Services Department (HSD)

SUMMARY

Synopsis of SPAC Amendment

The Senate Public Affairs Committee (SPAC) amendment strikes the requirement that a small

employer have a policy that prohibits the hiring of a person who smokes or uses tobacco

products. Instead, the amendment would require the small employer to have a non-smoking

policy for participation in the Small Employer Health Care Coverage program.

Synopsis of Original Bill

Senate Bill 663 amends a section in the Group Benefits Act to add a requirement of small

employers for participation in the Small Employer Health Care Coverage program, stating that

the employer must have a policy that prohibits the hiring of a person who smokes or uses

tobacco products. The policy must be in place at least one year prior to the effective date of the

health care coverage.

SIGNIFICANT ISSUES

According to PRC, the Group Benefits Act was amended in 2005 to provide for small employers

being given the opportunity to purchase health care coverage. The General Services Department

Senate Bill 663/aSPAC – Page

2

was to administer this program separately from its other programs under the act and maintain

separate accounting. The law requires that the separate funding of this program be actuarially

sound.

HSD indicates that the program was enacted to increase the level of New Mexicans with health

insurance and to promote employer based health insurance coverage. Adding the restriction

concerning smoking would decrease the number of eligible employers and employees who could

participate in SEIP and thus work against the goal of increasing health care coverage.

BE/nt