Notice of Introduction for Senate Bill 5335 - Update: 10 Year Analysis Complete
Office of the Governor / Office of Financial Management sent this bulletin at 05/05/2023 05:05 PM PDT
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SB 5335, titled AN ACT Relating to health care financing and development of the Washington health trust to ensure that all Washington residents can enroll in nonprofit health insurance coverage providing an essential set of health benefits, including
medical, dental, vision, and prescription drug benefits, has been introduced in the Senate. The Office of Financial Management has identified this bill as requiring a ten-year projection of increased cost to the taxpayers or affected fee payers.
Ten-year projection:
|
Fiscal |
Long-term Capital Gains Tax |
|
|
|
||
|
2024 |
$0 |
|
|
2025 |
$1,009,000,000 |
|
|
2026 |
$1,469,000,000 |
|
|
2027 |
$2,053,000,000 |
|
|
2028 |
$2,206,000,000 |
|
|
2029 |
$2,351,000,000 |
|
|
2030 |
$2,504,000,000 |
|
|
2031 |
$2,668,000,000 |
|
|
2032 |
$2,842,000,000 |
|
|
2033 |
$3,028,000,000 |
|
|
|
||
|
Total: |
$20,130,000,000 |
|
Employment Security Department:
SB 5335 establishes the Washington Health Trust. This bill impacts several agencies and has a high impact to the Employment Security Department (ESD) by requiring ESD to collect employee revenue to deposit into a health trust account, named the Washington Health Trust, for the purpose of paying for health care services.
The totality of premium collection described in Part 1 of the bill and collection of assessments described in Part 2 of the bill is indeterminate.
Part II of the bill specifies that Employment Security Department (ESD) will begin collecting premiums, established in section 107, and deposited into the benefits account described in section 123 of the act, on 3/1/24. The premium rate is to be established by the Board of Trustees by 11/1/24. Since the rate is not defined, ESD is unable to estimate cash receipts resulting from premium collections. Section 202 specifies that ESD will collect a Health Security Assessment of 10.5% of an employee’s wages less the employer's health care expenditures for that employee during the same reporting period. Section 203 specifies that ESD will collect a Personal Health Assessment of 2% of employees aggregate adjusted quarterly payroll. ESD is unable to begin collecting premiums by 3/1/24 and assumes in all fiscal estimates that premium collection will begin on the same timeline as the Health Security and Personal Health Assessments-- employers begin collecting premiums 1/1/27 and submitting remittance to ESD quarterly beginning 4/1/27.
The cash receipts estimate for the Health Security and Personal Health assessments are based on Paid Leave administrative data, the Bureau of Economic Analysis and the Economic and Revenue Forecast Council wage and salary forecast. Since data is not available with which to estimate the impact on receipts, the estimates exclude small employer hardship opt outs. There is no reliable data to support how many ESD expect, rules set for how long the opt out period is, nor how much of a reduction these employers would receive. These estimates make no adjustment for any employer's health care expenditures for employees during that same reporting period.
Employer/Employee assessments begin Jan 1, 2027, but are reported the month following the end of the quarter. Thus, the first collections will be Q2 of 2027. ESD assumes that employers will deduct the maximum 2% from employees’ wages and that the rate is stated at the maximum of 10.5% for all years. These estimates should be treated as the upper bounds of how much assessment revenue ESD could expect to collect from employers and sole proprietors.
SB 5335: Estimated Assessment Revenue
Fiscal Year Max Total Assessment Max Sole Prop Max Empl Maximum Employee Assessment
FY23 0 0 0 0
FY24 0 0 0 0
FY25 0 0 0 0
FY26 0 0 0 0
FY27 9,588,858,748 0 7,762,409,462 1,826,449,285
FY28 40,415,395,222 1,101,074,357 31,825,878,796 7,488,442,070
FY29 42,436,164,984 1,156,128,075 33,417,172,735 7,862,864,173
FY30 44,557,973,233 1,213,934,479 35,088,031,372 8,256,007,382
FY31 46,785,871,894 1,274,631,203 36,842,432,941 8,668,807,751
FY32 49,125,165,489 1,338,362,763 38,684,554,588 9,102,248,138
FY33 51,581,423,764 1,405,280,901 40,618,782,317 9,557,360,545
Department of Health:
The cash receipts impact of this bill is indeterminate.
The maximum monthly premium enrollee must pay for the “essential” healthcare benefits provided by this Trust is $200 per-member-per-month (Sec. 111(3)). The bill sets forth criteria that would lower or eliminate the monthly premium for certain individuals based on age, dual eligibility for Medicare and Medicaid, tribal affiliation, employment status, and/or financial need (Sec. 111(1)(a) & (b), (2), (4), (5), (6)).
To estimate the amount of cash receipts, the department would need to know the number of individuals who will enroll in the Trust and how many individuals that enroll meet the criteria that would lower or eliminate their monthly premium.
Ten-year projection prepared in consultation with the following agencies:
Department of Revenue
Department of Health
Employment Security Department
Bill sponsors and contact information:
Senator Bob Hasegawa, Prime Sponsor
Democrat
(360) 786-7616
bob.hasegawa@leg.wa.gov
Senator Sam Hunt
Democrat
(360) 786-7642
Sam.Hunt@leg.wa.gov
Senator Marko Liias
Democrat
(360) 786-7640
marko.liias@leg.wa.gov
Senator Joe Nguyen
Democrat
(360) 786-7667
NGUYEN_JO@leg.wa.gov
Senator Derek Stanford
Democrat
(360) 786-7600
derek.stanford@leg.wa.gov
Legislative Bill Information Website:
http://apps.leg.wa.gov/billinfo/
Initiative 960 Website: http://www.ofm.wa.gov/tax/default.asp