LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: SB 15 SLS 202ES 29
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: October 22, 2020 4:02 PM Author: MILLIGAN
Dept./Agy.: Office of Group Benefits (OGB)
Subject: Health insurance coverage Analyst: Tim Mathis
SCHOOLS EN INCREASE SG EX See Note Page 1 of 2
Requires first-day health insurance coverage for employees of public elementary and secondary school systems under
certain circumstances. (gov sig) (Item #42)
Present law allows public elementary and secondary school systems to provide group health insurance for their employees
and employees’ dependents either through the Office of Group Benefits (OGB) or through private or self-funded programs,
subject to OGB approval. Proposed law requires such coverage to begin on the first day of employment, provided that (1)
the school system is located in a gubernatorially or presidentially declared disaster or emergency area; (2) the declaration of
the disaster or emergency specifies risks to the health or well-being of any individual who engages in certain activities; and
(3) that such activities are integral to the services pertinent to employment at the school system. Requires the premium for
the first month to be paid immediately. The school system shall pay the employer contribution and the employee
contribution may be paid by either the employer or the employee. If the employer pays the initial employee contribution,
then the school system shall be reimbursed by a deduction from the employee’s wages. Effective upon governor's signature.
EXPENDITURES 2020-21 2021-22 2022-23 2023-24 2024-25 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. INCREASE SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds INCREASE SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Annual Total
REVENUES 2020-21 2021-22 2022-23 2023-24 2024-25 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. INCREASE SEE BELOW SEE BELOW SEE BELOW SEE BELOW
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
EXPENDITURE EXPLANATION
There will be an increase in the expenditures of school systems for an additional month’s insurance premium payments for
new hires during certain disaster declarations which meet the specific provisions of the bill. There will be increased costs to
the Office of Group Benefits (OGB) due to additional medical and pharmacy claims associated with the immediate effective
date. OGB will also experience increased costs for required changes to the program’s billing system to allow for either pro-
rated or full-month’s premium payments after the first of each month. However, OGB is still reviewing potential changes and
cannot identify those costs at this time.
Currently, OGB coverage becomes effective after the first full month of employment. For example, if an employee begins on
July 1, coverage will begin on August 1; if an employee is hired July 15, coverage will begin on September 1. OGB sends
participating employers a monthly invoice premium statement with the total amount of employer and employee contributions
due to OGB. The employer collects employee contributions by payroll deduction and remits the invoice premium to OGB
within 30 days after receipt.
The proposed law would require a school system to pay the premium for the first month’s insurance immediately. The
employer may initially pay the employee’s contribution in the first premium payment to be reimbursed by a deduction from
the employee’s wages once his or her first paycheck is issued. Local school systems will incur an increase in expenditures,
which will vary based on the scope and risks specified by the disaster or emergency declaration, and the number of new
employees hired within the allowable timeframe.
According to OGB, 43 out of 69 city and parish school systems and 15 out of 147 charter schools participate in OGB plans.
School systems that offer private or self-funded plans will experience similar costs as systems participating in OGB plans.
CONTINUED ON PAGE 2
REVENUE EXPLANATION
There will be an increase in self-generated revenues for the Office of Group Benefits (OGB) due to increased premium
receipts from local school systems. Currently, coverage begins after the first full month of employment. Proposed
legislation will require a payment beginning the date of hire.
Senate Dual Referral Rules House
x 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} Staff Director
 LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: SB 15 SLS 202ES 29
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: October 22, 2020 4:02 PM Author: MILLIGAN
Dept./Agy.: Office of Group Benefits (OGB)
Subject: Health insurance coverage Analyst: Tim Mathis
CONTINUED EXPLANATION from page one: Page 2 of 2
Utilizing information from the Teachers Retirement System of LA (TRSL) and the LA School Employees Retirement System
(LSERS), the LFO estimates approximately 4,000 new hires occurred in the period March through September 2020 during
which the COVID-19 Emergency Declaration was in place; this does not include employees who transferred from other
school districts. Based on current billing information of existing employees, the average employer monthly contribution rate
is approximately $675. This would equate to an additional $2.7 M in employer contributions (4,000 x $675). Due to the
uncertainty of how many employees would qualify for first-day coverage under the proposed law, as well as the risks posed
to school employees in each phase of the Governor’s Executive Order, if only 10% of the new hires within the March through
September 2020 period qualified (400), this would equate to $270 K in increased costs to local school districts (400 x $675).
The potential impact to local school systems will be reduced to the extent the first month’s payment is pro-rated to the
actual number of days worked.
According to information received from the Governor’s Office of Homeland Security and Emergency Preparedness (GOHSEP),
there were 13 major disaster declarations and 6 emergency declarations over the past ten years. If the current emergency
declaration meets the specific triggers there will be an FY 21 impact. Future impacts will occur only to the extent an
emergency declaration meeting the triggers is declared.
Senate Dual Referral Rules House
x 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} Staff Director


Statutes affected:
SB15 Original: 17:81(O), 42:851(U), 42:851(E)(2)
SB15 Engrossed: 17:81(O), 42:851(U), 42:851(E)(2)
SB15 Enrolled: 17:81(O), 42:851(U), 42:851(E)(2)
SB15 Act 32: 17:81(O), 42:851(U), 42:851(E)(2)