REPORT TITLE:
Health Fund

DESCRIPTION:
Eliminate state and county employer contributions for health
benefits for dependents of employees hired after the effective
date of this Act and limit employer health fund benefit
contributions for their employees when they retire. (HB1060 HD1)


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1060
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO THE PUBLIC EMPLOYEES HEALTH FUND.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 87, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "§87-      State and county contributions to the fund;
 
 5 employees hired after June 30, 1999.  (a)  This section shall
 
 6 apply to state and county contributions to the fund for employees
 
 7 who are hired after June 30, 1999; provided this section shall
 
 8 not apply if an employee is hired prior to July 1, 1999 and
 
 9 transfers employment after June 30, 1999 or has at least ten
 
10 years of credited service and has suffered a break in service.
 
11 For the purposes of this section "transfer" means to leave state
 
12 or county employment and return within ninety calendar days.
 
13      (b)  The State, through the department of budget and finance
 
14 and the several counties through their respective departments of
 
15 finance shall pay to the fund a monthly contribution established
 
16 under chapter 89C or specified in the applicable public sector
 
17 collective bargaining agreement for each of their respective
 
18 employee-beneficiaries, which shall be used toward the payment of
 
19 cost of health benefits plan; provided that payment shall be
 
20 limited to the monthly contributions of a single plan only.  If
 

 
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 1 both husband and wife are employee-beneficiaries, the total
 
 2 contribution by the State or the appropriate county shall not
 
 3 exceed the monthly contribution of two single plans.  If however,
 
 4 the State or any of the several counties establish cafeteria
 
 5 plans in accordance with section 125 of the Internal Revenue Code
 
 6 of 1986, as amended, and part II of chapter 78, the monthly
 
 7 contribution to the fund for those employees who participate in a
 
 8 cafeteria plan shall be made through the cafeteria plan.  In this
 
 9 event, the payments made by the State or the counties shall
 
10 include the State's and the counties respective contributions to
 
11 the fund and the employee-beneficiary's share of the cost of the
 
12 health benefits plan selected and authorized by the employee-
 
13 beneficiary through the cafeteria plan.
 
14      (c)  Any monthly contribution established under chapter 89C
 
15 or specified in the applicable public sector collective
 
16 bargaining agreement, whichever is appropriate, for each child
 
17 who has not attained the age of nineteen of all employee-
 
18 beneficiaries who are enrolled for dental benefits shall be borne
 
19 by the employee-beneficiary and shall not be an obligation of the
 
20 State or counties.
 
21      (d)  The State through the department of budget and finance
 
22 and the several counties through their respective departments of
 
23 finance shall pay to the fund a monthly contribution equal to the
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 amount established under chapter 89C or specified in the
 
 2 applicable public sector collective bargaining agreement,
 
 3 whichever is applicable, for each of their respective employees,
 
 4 to be used towards the payment of group life insurance benefits
 
 5 for each employee.
 
 6      (e)  The several counties through their respective
 
 7 departments of finance shall annually reimburse the State no
 
 8 later than December 30 of each fiscal year for their respective
 
 9 pro-rata share of the cost of administering the fund for the
 
10 fiscal year for the benefit of their employee-beneficiaries and
 
11 dependent beneficiaries.  Each county's pro-rata share shall be
 
12 determined by allocating the amount appropriated for
 
13 administering the fund for the fiscal year, after excluding
 
14 therefrom state and county contributions for health and group
 
15 life insurance benefits, and in the same proportion as the
 
16 aggregate annual amount of state and county contributions for
 
17 such benefits as of October 31 of the preceding fiscal year.  The
 
18 amount of any excess or deficiency required to administer the
 
19 fund shall be subtracted from or added to, as the case may be,
 
20 the amount due from each county for the succeeding fiscal year.
 
21      (f)  The State, through the department of budget and finance
 
22 and the several counties through their respective departments of
 
23 finance shall advance the amount of their respective employee-
 

 
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 1 beneficiaries contributions to the fund on or before the first
 
 2 day of each month.
 
 3      (g)  Contributions made by the State or the several counties
 
 4 shall not be considered as wages or salary of an employee-
 
 5 beneficiary, and no employee-beneficiary shall have any vested
 
 6 right in or be entitled to receive any part of any contribution
 
 7 made to the fund."
 
 8      SECTION 2.  Chapter 87, Hawaii Revised Statutes, is amended
 
 9 by adding a new section to be appropriately designated and to
 
10 read as follows:
 
11      "§87-      State and County contributions to the fund;
 
12 employees hired after June 30, 1999, and retired.  (a)  This
 
13 section shall apply to state and county contributions to the fund
 
14 for employees who were hired after June 30, 1999 and who retired
 
15 provided that this section shall not apply if an employee is
 
16 hired prior to July 1, 1999, and transfers employment after June
 
17 30, 1999 nor to any employee who has at least ten years of
 
18 credited service and who has suffered a break in service.  For
 
19 the purposes of this section "transfer" means to leave state or
 
20 county employment and return to state or county employment within
 
21 ninety calendar days.
 
22      (b)  For purposes of this section, if an employee leaves
 
23 state or county employment and returns to state or county
 

 
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 1 employment after the effective date of this Act, when the
 
 2 employee's years of service shall be computed in the same manner
 
 3 as set forth in chapter 88.
 
 4      (c)  The State, through the department of budget and finance
 
 5 and the several counties through their respective departments of
 
 6 finance, shall pay to the fund a monthly contribution equal to
 
 7 one-half of the retired employee's monthly medicare or
 
 8 nonmedicare premium based on a single plan for retired employees
 
 9 with ten or more years but fewer than fifteen years of service;
 
10 seventy-five per cent of the retired employee's monthly medicare
 
11 or nonmedicare premium based on a single plan for retired
 
12 employees with at least fifteen but fewer than twenty-five years
 
13 of service; and one hundred per cent of the retired employee's
 
14 monthly medicare or nonmedicare premium based on a single plan
 
15 for retired employees with twenty-five or more years of service
 
16 for the following benefits:
 
17           (1)  For hospital, medical, and surgical benefits for a
 
18                health benefits plan for each of their respective
 
19                employee-beneficiaries or their respective
 
20                employee-beneficiaries and their dependent
 
21                beneficiaries enrolled under this section;
 
22           (2)  For prescription drug benefits of a health
 
23                benefits plan for each of their respective
 

 
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 1                employee-beneficiaries or their respective
 
 2                employee-beneficiaries and their dependent
 
 3                enrolled under this section;
 
 4           (3)  For vision care benefits of a health benefits plan
 
 5                for each of their respective employee-
 
 6                beneficiaries or their respective employee-
 
 7                beneficiaries and their dependent beneficiaries
 
 8                enrolled under this section; and
 
 9           (4)  For adult dental benefits of a health benefits
 
10                plan for each of their respective employee-
 
11                beneficiaries or their respective employee-
 
12                beneficiaries and their spouses enrolled under
 
13                this section.
 
14      If both husband and wife are employee-beneficiaries, the
 
15 total contribution by the State or the appropriate county, after
 
16 an employee's retirement pursuant to this section, shall not
 
17 exceed the monthly contribution of two single plans.
 
18      (d)  After an employee's retirement pursuant to this
 
19 section, the total monthly premiums for each child who has not
 
20 attained the age of nineteen of all employee-beneficiaries who
 
21 are enrolled in the fund's dental plan for children under this
 
22 section shall be borne by the retiree.
 

 
 
 
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 1      (e)  The State, through the department of budget and finance
 
 2 and the several counties through their respective departments of
 
 3 finance, shall pay to the fund a monthly contribution equal to
 
 4 the total monthly premium for each retired employee enrolled in
 
 5 the fund's group life insurance benefits plan under this section.
 
 6      (f)  For the purpose of this section, the retired employee's
 
 7 monthly medicare and nonmedicare premiums for the hospital,
 
 8 medical, and surgical plan, the prescription drug plan, the
 
 9 vision care plan, and the adult dental plan shall be established
 
10 annually by the board and shall be equal to the retired
 
11 employee's medicare and nonmedicare premiums for the hospital,
 
12 medical, and surgical plan, the prescription drug plan, the
 
13 vision care plan, the adult dental plan contracted by the fund
 
14 with the largest enrollment.
 
15      (g)  The State, through the department of budget and finance
 
16 and the several counties through their respective departments of
 
17 finance, shall advance the amount of their respective employee-
 
18 beneficiaries' contributions to the fund on or before the first
 
19 day of each month.
 
20      (h)  Contributions made by the State or the several counties
 
21 shall not be considered as wages or salary of an employee-
 
22 beneficiary, and no employee-beneficiary shall have any vested
 
23 right in or be entitled to receive any part of any contribution
 
24 made to the fund."
 

 
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 1      SECTION 3.  Section 87-22.3, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§87-22.3  Determination of health benefits plans.  Pursuant
 
 4 to section 87-4, 87-4.5, 87-4.6, 87-   (b), and 87-   (c) the
 
 5 board of trustees shall provide health benefits to employee-
 
 6 beneficiaries in the following manner:
 
 7      (1)  For those employee-beneficiaries who are not
 
 8           participating in a health benefits plan of an employee
 
 9           organization (hereafter "nonparticipating employee-
 
10           beneficiaries"), the board of trustees shall establish
 
11           health benefits plans and the requirements for
 
12           eligibility under the health benefits plans.  Any rate
 
13           credit or reimbursement from any carrier derived from
 
14           employee-beneficiary rate contributions to health
 
15           benefits plans of nonparticipating employee-
 
16           beneficiaries or interest derived therefrom may be used
 
17           to improve the respective health benefits plans of
 
18           nonparticipating employee-beneficiaries or to reduce
 
19           the employee-beneficiary's respective share of monthly
 
20           contributions to a health plan; or
 
21      (2)  For employee-beneficiaries who participate in the
 
22           health benefits plan of an employee organization, the
 
23           board of trustees shall pay a monthly contribution for
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           each employee-beneficiary, in the amount provided in
 
 2           section 87-4(a), 87-4.5(b), 87-4.6(c), 87-    (b) and
 
 3           87-    (c), or the actual monthly cost of the coverage,
 
 4           whichever is less, towards the purchase of health
 
 5           benefits under the health benefits plan of an employee
 
 6           organization. 
 
 7      SECTION 4.  Section 87-22.5, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "§87-22.5  Determination of dental plan benefits.  (a)
 
10 Pursuant to section 87-4, 87-4.5, and 87-4.6, the board of
 
11 trustees shall provide dental plan benefits to the children of
 
12 employee-beneficiaries who have not attained the age of nineteen
 
13 in the following manner:
 
14      (1)  For those children of employee-beneficiaries who are
 
15           not participating in a dental program of an employee
 
16           organization (hereafter called "nonparticipating
 
17           employee-beneficiaries"), the board shall determine a
 
18           dental plan and eligibility requirements for such
 
19           benefits based upon a statutory monthly contribution
 
20           per enrolled child;
 
21      (2)  For those children of employee-beneficiaries who
 
22           participate in the dental program of an employee
 
23           organization, the board shall allot the statutory
 

 
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 1           monthly contribution per enrolled child or the actual
 
 2           monthly cost of the child's coverage, whichever is
 
 3           less, towards the purchase of dental plan benefits
 
 4           under the dental program of an employee organization;
 
 5           provided that no enrolled child shall have more than
 
 6           one allotment a month; or
 
 7      (3)  Paragraphs (1) and (2) notwithstanding, an employee-
 
 8           beneficiary shall be required to enroll all of the
 
 9           employee-beneficiary's children who are under the age
 
10           of nineteen in the children's dental plan for
 
11           nonparticipating employee-beneficiaries  or the dental
 
12           program of an employee organization.
 
13      (b)  Pursuant to 87-    (c) and 87-    (d) the board of
 
14 trustees shall provide dental plan benefits to the children of
 
15 employee-beneficiaries who have not attained the age of nineteen
 
16 as follows:
 
17      (1)  For those children of employee-beneficiaries who are
 
18           not participating in a dental program of an employee
 
19           organization (hereinafter called "non-participating
 
20           employee-beneficiaries"), the board shall determine a
 
21           dental plan and eligibility requirements for such
 
22           benefits based upon a statutory monthly contribution
 
23           per enrolled child."
 

 
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 1      SECTION 5.  Section 87-23, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§87-23  Determination of benefits under the group life
 
 4 benefit program or group life insurance program.  Pursuant to
 
 5 section 87-4, 87-4.5, 87-4.6, 87-    (d), and 87-    (e), the
 
 6 board of trustees shall provide benefits under a group life
 
 7 benefit program or group life insurance program to employees in
 
 8 the following manner:
 
 9      (1)  For those employees who are not participating in a
 
10           group life benefit program or group life insurance
 
11           program of an employee organization (hereafter
 
12           "nonparticipating employees"), the board shall
 
13           determine a group life insurance benefit plan and
 
14           eligibility requirements for such benefits based upon
 
15           the amount to be contributed per employee under section
 
16           87-4(c)[;], 87-    (d), and 87-    (e);
 
17      (2)  For those employees who participate in a group life
 
18           benefit program or group life insurance program of an
 
19           employee organization, the board shall pay a monthly
 
20           contribution for each employee, in the amount
 
21           determined under section 87-4(c), 87-    (d), and 87-
 
22               (e), or the actual monthly cost of the coverage,
 
23           whichever is less, towards the purchase of benefits
 

 
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 1           under the group life benefit program or group life
 
 2           insurance program of an employee organization; or
 
 3      (3)  Paragraphs (1) and (2) notwithstanding, an employee who
 
 4           is participating in a group life benefit program or
 
 5           group life insurance program of an employee
 
 6           organization may continue such plan and pay all of the
 
 7           premiums required while enrolled under paragraph (1);
 
 8           provided that no employee shall have more than one
 
 9           contribution from the board per month.
 
10      SECTION 6.  New statutory material is underscored.
 
11      SECTION 7.  This Act shall take effect on July 1, 1999.