LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 616 HLS 24RS 716
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: June 3, 2024 5:39 PM Author: GREEN
Dept./Agy.: Insurance
Subject: Mandated Health Actuarial Analysis Analyst: Patrice Thomas
INSURANCE/HEALTH EN INCREASE SG RV See Note Page 1 of 1
Provides relative to actuarial reviews of healthcare legislation
Proposed law enacts an actuarial review of proposed healthcare legislation that mandates health benefits. Proposed law requires the
following: (1) set forth February 1st deadline for the LA Department of Insurance (LDI) to contract with an actuary or actuarial firm or a
Louisiana-based university department/academic faculty to perform an evaluation and, if required, an one year actuarial review of
legislation that mandates new health benefits coverage; (2) provides an annual deadline of December 1st for legislators to request
actuarial reviews on legislation; (3) provides for specific information in the actuarial review and authorizes actuarial reviews to use data
from insurance carriers, which must provide data; (4) upon enactment of any legislative proposal that has defrayal costs identified by the
actuarial review, LDI shall send written notification to the Commissioner of Administration and chairmen of Senate Finance and House
Appropriations with estimated costs; (5) Commissioner shall request appropriation before implementation; (6) LDI shall require insurance
carriers to annually provide per member per month defrayal costs, determine if actuarially sound, and provide notification to
Commissioner, who shall request an appropriation. Proposed law provides that LDI shall not enter into any contract to perform an actuarial
review unless funding is available within its existing appropriation to pay a contractor. Proposed law provides for confidentiality.
EXPENDITURES 2024-25 2025-26 2026-27 2027-28 2028-29 5 -YEAR TOTAL
State Gen. Fd. SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Agy. Self-Gen. INCREASE INCREASE INCREASE INCREASE INCREASE
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total
REVENUES 2024-25 2025-26 2026-27 2027-28 2028-29 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0 $0 $0
EXPENDITURE EXPLANATION
The proposed law will likely increase SGR expenditures within the LA Department of Insurance (LDI) for contracting with an actuary, an
actuarial firm, or a Louisiana-based university department or academic faculty to perform an evaluation and, if necessary, an actuarial
review of the proposed healthcare legislation. The proposed law requires the Legislature to appropriate any defrayal costs. To the extent
the Legislature enacts legislation with health coverage mandates and makes an appropriation, the proposed law may increase state
defrayal payments, assumed to be SGF, to health insurance exchanges associated with coverage mandates.
LA Department of Insurance (LDI) - The proposed law requires LDI to contract with an actuary/actuarial firm, or a Louisiana-based
university or academic faculty, that must be neutral and free from conflicts of interest, to perform evaluations and, if necessary, actuarial
reviews of legislation that mandates a new health benefit coverage on health plan benefits or reduce/eliminate coverage mandated under
health benefit plans. Historically, based on past legislative sessions, LDI utilizes existing staff actuaries that review three to four legislative
proposals each session with defrayal costs. To perform the specific analysis required under the proposed law, LDI reports a professional
services contract to cost approximately $30,000 per actuarial review; a total cost of $90,000 SGR annually based on an estimated three
reviews. Additionally, the proposed law provides that LDI shall not retain a contractor to perform actuarial reviews unless the department
determines adequate resources are available within its existing appropriation. To the extent that LDI does not have sufficient SGR to
contract for actuarial reviews and continues to utilize existing staff actuaries, the cost of this proposed law may be mitigated.
Insurance Exchanges Impact (State General Fund Defrayal) - Upon enactment and implementation of any legislative proposal that
results in the defrayal cost of the enacted mandate, LDI shall require insurance carriers to provide actuarial estimates based on claims
data of the per member/per month amount necessary to defray the cost of the enacted mandate. After determining if the per member/per
month cost is actuarially sound, LDI shall provide written notification to the chairmen of the Senate Finance Committee and House
Appropriation Committee, and the Commissioner of Administration. The Commissioner shall request an appropriation from the Legislature
to pay the defrayal costs before implementation in the subsequent plan year.
Note: Under the Affordable Care Act (ACA), essential health benefits (EHB) are a set of 10 categories of services that qualified health plans
(QHPs) must cover. The ACA allowed each state to select a benchmark plan that will be used as the standard for EHB coverage within the
state. Once the state decides upon a benchmark health plan, all health insurance carriers use the benchmark plan as a guide for creating
their own EHB coverage. Any state benefit mandate, through legislative or regulatory action, that exceeds what is considered an EHB
under the benchmark plan is subject to state defrayal.
REVENUE EXPLANATION
There is no anticipated direct material effect on governmental revenues as a result of this measure.
Senate Dual Referral Rules House
13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
13.5.2 >= $500,000 Annual Tax or Fee Alan M. Boxberger
6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Legislative Fiscal Officer


Statutes affected:
HB616 Original: 22:2188(A), 22:2188(B)
HB616 Engrossed: 22:2188(A), 22:2188(B)
HB616 Reengrossed: 22:2188(A), 22:2188(B)
HB616 Enrolled: 22:2188(A)
HB616 Act 714: 22:2188(A)