Insurance Department

The enacted budget makes the following changes to the Executive Budget:

• Decreases the Executive Budget’s All Funds appropriation by $1.64 million, the Department's SFY 2010-11 All Funds appropriation is a $5.32 million decrease from its SFY 2009-10 enacted budget All Funds appropriation.

• The enacted budget’s decreased appropriation is as follows:  Regulation Program personal service decrease of -$732,000 and contractual service decrease of -$670,000.

The Senate accepts the Executive’s all funds proposal (analysis as of March 22, 2010).

The 21-day amendments propose the following changes (analysis as of February 10, 2010):

• A $4.1 million decrease in the department’s Special Revenue Other (SRO) appropriations related to Non Personal Services. The decreases are allocated as follows: 
  • $660,000 decrease in the Administration program;
  • $404,000 decrease in the Consumer Services program;
  • $3.0 million decrease in the Regulation program.
• A $934,000 increase in its SRO personal services appropriations within the Regulation program as follows: 
  • $363,000 increase in the- Pharmaceutical Program
  • $422,000 increase in the Enhanced Newborn Screening.

• A$1.78 million increase in its SRO contractual services appropriation within the Regulation Program - Pharmaceutical Program.
• Certain Department of Health suballocations in the Regulation Program are restored to sustainable levels, including an increase of $2.18 million for the Pharmaceutical Program suballocation ($363,000 in personal service) and $556,697 in the Enhanced Newborn Screening suballocation ($422,866 in personal services).

The Executive Budget recommends (analysis as of January 21, 2010):

A FY 2010-11 workforce of 992.  This is an increase of 70 FTEs from the adjusted FTE level for FY 2009-10.  The increase in FTEs will allow the Department to the hire three classes of examiner trainees and provide staffing to support enhanced oversight of the health care insurance industry.  Moreover, the addition of newly-trained insurance examiners will allow the Department to perform more onsite examinations and will result in savings to the industry by reducing the number of costlier direct-pay examinations.   The following chart identifies adjustments in current fiscal years FTEs along with the recommended differences in FY 2010-11 FTEs by program (if the FTE’s are the same the program is not listed):

• The total appropriation for Personal Service is $105.9 million, a decrease of $4.63 million

(-4.2%).

• The total appropriation for Contractual Service is $37.87 million, a decrease of $5.95 million (-13.6%).  Most of this decrease is found in a $5.5 million reduction, or -34.9%, in the maintenance undistributed in the Pharmaceutical Program and the $900,000 decrease in the TraCS Project, or -90%.  This is partially offset by a $1.39 million increase in the Insurance Department Account.

• An All Funds appropriation of $230.56 million, a decrease of $533,000 million, or -.2%.

·         Significant decreases in personal services in the following program areas:

o   Regulation Program: Insurance Department Account SRO:  a decrease of $1.56 million, or -2.7%; Maintenance Undistributed Fire Safety Standards, a decrease of $353,348, or -53.7%; Maintenance Undistributed No Fault Auto Insurance, a decrease of $638,839, or  -19.7%; Maintenance Undistributed Investigating Broker/Insurer a decrease of $408,794, or -40.9%; Maintenance Undistributed Pharmaceutical Program a decrease of $1.07 million, or -35.8%; Maintenance Undistributed Enhanced Newborn Screening a decrease of $422,000, or -9.7%.

·         There are substantial increases in the indirect costs in the following programs:  Administration, an increase of $1.37 million, or 395%; Consumer Service an increase of $1.03 million, or 336%; Insurance Department Account an increase of $6.54 million, or 326%; State Building Code an increase of $516,000, or 335%; State Fire Reporting Control Program and increase of $774,697, or 335%; No Fault Auto Insurance an increase of $318,000, or 255%; Center for Community Health an increase of $774,000, or 335%; Enhanced Newborn Screening an increase of $498,963, or 298%.  Information regarding the nature of these increases should be sought at L/M.