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

SPONSOR Beffort

ORIGINAL DATE

LAST UPDATED

01/23/08

HB

SHORT TITLE Certain Child care Workers Premium Payments

SB 133

ANALYST Weber

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$1,000.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates Appropriation in the General Appropriation Act

Relates to Appropriation in the General Appropriation Act

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

FY10

$7,646.0

But depends on final

program design

$7,000.0

But depends on final

program design

Recurring

Federal

Medicaid Fund

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department (HSD)

Children Youth and Families Department (CYFD)

Public Education Department (PED)

SUMMARY

Synopsis of Bill

Senate Bill 133 appropriates $1 million from the general fund to The Human Services

Department pay the employee portion of a health insurance premium for a child care worker

eligible for coverage available through a Medicaid health insurance flexibility and accountability

waiver program. When such coverage is offered by a provider that is an eligible child care

Senate Bill 133 – Page

2

provider pursuant to the Pre-Kindergarten Act or that accepts children enrolled in health or

human service programs pursuant to Chapter 27 NMSA 1978 the employee is eligible.

FISCAL IMPLICATIONS

The appropriation of $1 million contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of FY09 shall revert to the

general fund.

HSD notes that the waiver program currently available is the State Coverage Insurance. Full SCI

coverage cost per enrollee per year is $9,600 public share ($1,954 State share and $7,646 Federal

Share), $75.00 employer share and $240 (employees above 101% FPL and below 151% FPL) or

$420 (for employees above151% FPL and below 200% FPL) employee share. If employees are

projected at 50% in each FPL group, the annual total cost per 100 employees is $1,083.0 ($33.0

employee share; $90.0 employer share; and $960.0 public share).

Only the public share is matchable with federal funds.

HSD continues:

Several funding scenarios are possible:

If the $1,000.0 appropriation is allocated only to the employee share, 3,030 employees could be

served. This allocation would require an employer share of $2,727.2 and a public share of

$30,090.0 (State share of $6,920.0 and Federal share of $23,170.9). This state share would

constitute 16% of the $44,268.0 state funds budgeted for all SCI for FY09.

If the $1,000.0 appropriation is allocated to both the employee and state share, 438 employees

could be served. This allocation would require an employer share of $394.0 and would generate

a Federal share of $3,348.3).

SIGNIFICANT ISSUES

CYFD notes the following:

Low-wage industries (including child care) typically experience relatively high rates of staff

turnover. The provision of health insurance could help a childcare provider retain staff. As

continuity of care (i.e., the same caregiver serving the same child) helps to promote a child’s

well-being as he or she develops, reducing staff turnover could improve the quality of care a

program is able to provide.

CYFD already is cooperating with HSD in marketing premium assistance programs to child care

programs and would continue to do so if this legislation were enacted.

The bill refers to providers that are eligible pursuant to the Pre-Kindergarten Act, which defines

an eligible provider as being “licensed by the children, youth and families department that

provides early childhood developmental readiness services or preschool special education, or is a

public school, tribal program or head start program." (32A-23-3 NMSA 1978) This definition

includes licensed childcare centers and licensed homes. Based on data from the New Mexico

Senate Bill 133 – Page

3

Department of Labor, individuals working in licensed childcare programs in 2007 earn an

average wage of $7.85 per hour. A significant number of these workers likely would be eligible

for the health insurance coverage referenced in this bill.

MW/bb