Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 larry.campbell@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Larry L. Campbell, Director Laura Kelly, Governor


March 5, 2019


The Honorable Robert Olson, Chairperson
Senate Committee on Financial Institutions and Insurance
Statehouse, Room 236-E
Topeka, Kansas 66612
Dear Senator Olson:
SUBJECT: Fiscal Note for SB 163 by Senate Committee on Public Health and Welfare
In accordance with KSA 75-3715a, the following fiscal note concerning SB 163 is
respectfully submitted to your committee.
SB 163 would require health insurance policies issued on or after January 1, 2020, to
provide coverage for United States Food and Drug Administration (FDA) approved contraceptive
drugs, devices and other products, or substantially equivalent drugs, devices and other products,
as established by rules and regulations adopted by the Insurance Department. The bill would
prohibit health insurers from imposing cost-sharing requirements on members except on
grandfathered plans and from imposing any delays or restrictions on the coverage. The bill would
require the benefits for the insured to be the same as the insured’s covered spouse or domestic
partner and covered non-spouse dependents. In addition, the bill would allow religious employers
to request an exemption and would require such employers to provide written notice prior to
enrollment listing the contraceptive healthcare services the employer refuses to cover for religious
reasons.
The Kansas Department of Health and Environment (KDHE) indicates that enactment of
the bill could result in additional expenditures of $9,705 in FY 2020 and $20,768 in FY 2021 for
increased employer and employee contributions to the State Employee Health Plan (SEHP). The
agency states that enactment of the bill would require coverage of all FDA approved contraceptive
drugs and devices without any cost-sharing to members. If the use of contraceptive drugs or
devices is deemed unadvisable by a SEHP provider, then the agency states an alternative method
would be utilized such as sterilization. Under Internal Revenue Service guidance, Qualified High
Deductible Health Plans, such as Plans C or N under the SEHP, would not be able to cover male
contraceptives or sterilization in full prior to the member meeting the deductible without placing
the tax-exempt status of the health savings account at risk. The agency states that this would
require increased premiums to cover such costs. However, KDHE also states that enactment of
the bill would have no fiscal effect on the Medicaid program because the drugs, devices or products
described in the bill are already covered by Medicaid.
The Honorable Robert Olson, Chairperson
Page 2—SB 163

The Insurance Department indicates that enactment of SB 163 would create a mandate for
health plans to include coverage that is not included in the state’s benchmark plan. The agency
indicates that the state would be required to pay the additional cost of benefits for exchange
enrollees that are in excess of those associated with the benchmark plan. However, the fiscal effect
cannot be estimated. Any fiscal effect associated with SB 163 is not reflected in The FY 2020
Governor’s Budget Report.


Sincerely,

Larry L. Campbell
Director of the Budget


cc: Glenda Haverkamp, Insurance
Dan Thimmesch, Health & Environment


Statutes affected:
As introduced: 40-2249a, 40-2, 40-19c09, 40-2407, 40-2411