NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

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(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

New Mexico Retiree Health Care Authority (NMRHCA)

New Mexico Public School Insurance Authority (NMPSIA)

State Department of Public Education

SUMMARY

Synopsis of HBIC Amendment

The House Business and Industry Committee amendment adds private school employees to the eligible groups for participation in Public School Insurance Authority core insurance programs.

Synopsis of Bill

House Bill 589 allows former legislators and members of certain boards and their dependents to participate in the Retiree Health Care Authority program. Current legislators and members of governing boards and private charter school employees and their dependents would participate in the Public School Insurance Authority program.

Significant Issues

This bill would amend the Retiree Health Care Act by creating two additional classes of eligible individuals. The two new classes would be subject to a monthly participation fee. Also, employees of private schools would be eligible to participate in the NMRHCA program when they retire, providing that they meet the criteria for new employers as established by the NMRHCA Board of Directors.

Former Legislators and former board members would pay a monthly amount equal to one-twelfth of the cost allocation and administrative costs of the selected plan. HB 589 would also allow current board members and current Legislators to participate in the NMPSIA program. Also, active employees of private and charter schools would be eligible to participate in the NMPSIA program.

FISCAL IMPLICATIONS

There is no appropriation contained within this bill. NMPSIA indicates that a new premium revenue would result. The amounts of these new revenues are negligible as the contributors are covering their full costs and savings would not be cumulative. Individual legislators and board members would pay 100% of their cost. The private school employees would pay a premium that would be equal to the amounts paid by current school employees enrolled in NMPSIA program, unless the NMPSIA rates each participating school on its medical experience, in which case some schools may pay higher premiums.

ADMINISTRATIVE IMPLICATIONS

NMRHCA indicates that they could absorb the immediate impact within their existing capacity. However, over a period of time, the addition of the new groups may require additional personnel. Also, NMPSIA indicates that orientation, training, and enrollment meetings would have to be held at each of the new participating entities by NMPSIA staff and appropriate vendors. They also indicate a possible need for additional staff.

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