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

SPONSOR SFL

ORIGINAL DATE

LAST UPDATED

2/12/08

HB

SHORT TITLE High Deductible Health Plan Savings Accounts

SB 407/SFlCS

ANALYST Earnest

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

FY10

$0.0

$0.0

$0.0 Recurring General Fund

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Health Policy Commission (HPC)

Human Services Department (HSD)

Responses Not Received From

Taxation and Revenue Department (TRD)

Public Regulation Commission (PRC)

SUMMARY

Synopsis of Bill

The Senate Floor substitute for Senate Bill 407 (SB407s) provides that beginning July 1, 2009,

health insurers may offer a health coverage option of a high-deductible policy with a health

savings account (HSA), and requires rulemaking and recommendations from the Insurance

Division.

SB407s allows health insurers to offer consumers who are seeking a comprehensive major

medical policy the option of a policy with a deductible of at least $2,500 in conjunction with a

HSA. A person who wishes to obtain a high-deductible health plan must present evidence to the

insurer that the person has established a health savings account in compliance with the Internal

Revenue Code.

Senate Bill 407/SFlCS – Page

2

The bill directs that health coverage plans offering a high-deductible policy in conjunction with a

health savings account shall be considered “creditable coverage" under the Insurance Code and

will meet any health coverage requirements pursuant to law or rule.

The Insurance Division would be required to promulgate rules for the administration and

implementation of this section, and prior to October 1, 2008, to recommend to the interim

Legislative Health and Human Services Committee legislation and other measures to encourage

the use of the new health plans.

FISCAL IMPLICATIONS

None identified.

SIGNIFICANT ISSUES

The bill declares that high-deductible health plans shall qualify as creditable coverage.

According to HSD:

This bill allows health insurers to design benefit plans which are exempt from the

protection of the Minimum Healthcare Protection Act which now defines bottom line

benefit coverage for health plans in the state. Consumers could be harmed by purchasing

coverage without fully understanding that it is significantly less than comprehensive and

does not have the usual basic standard benefits included.

Creating creditable coverage for this product in advance of the legislature making a

determination regarding universal health coverage and on the other health care reform

measures currently before it could impede measures to assure access to comprehensive

health care for all New Mexicans.

ADMINISTRATIVE IMPLICATIONS

The Insurance Division of the PRC would be required to promulgate new rules for verifying the

establishment of a health savings account and report to the Legislature.

BE/bb