REPORT TITLE:
Union Health Trust Fund


DESCRIPTION:
Creates an employer-union trust fund as a single public employees
health benefits delivery system administered by a board of
directors and held outside the state treasury.  (HB1869 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1869
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO PUBLIC EMPLOYEE HEALTH BENEFITS.
 


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

 1      SECTION 1.  The Hawaii Revised Statutes is amended by adding
 
 2 a new chapter to be appropriately designated and to read as
 
 3 follows:
 
 4                             "CHAPTER 
 
 5         HAWAII EMPLOYER-UNION HEALTH BENEFITS TRUST FUND
 
 6                       PART I.  DEFINITIONS
 
 7      §  -1 Definitions.  As used in this chapter:
 
 8      "Board" or "board of directors" means the board of directors
 
 9 of the Hawaii employer-union health benefits trust established in
 
10 section    -18.
 
11      "Carrier" means a voluntary association, corporation,
 
12 partnership, or organization engaged in providing, paying for,
 
13 arranging for, or reimbursing the cost of health or long-term
 
14 care services under group insurance contracts or medical,
 
15 hospital, or dental services agreements.
 
16      "Contributions" means money payments made to the fund by the
 
17 State or the several counties or an employee-beneficiary or
 
18 qualified-beneficiary.
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      "Dependent-beneficiary" means:
 
 2      (1)  An employee-beneficiary's spouse;
 
 3      (2)  Any unmarried child deemed eligible by the board,
 
 4           including a legally adopted child, stepchild, foster
 
 5           child, or recognized natural child who lives with the
 
 6           employee-beneficiary; and
 
 7      (3)  Any unmarried child regardless of age who is incapable
 
 8           of self-support because of a mental or physical
 
 9           incapacity which existed prior to the unmarried child's
 
10           reaching the age of nineteen years.
 
11      "Employee" means an employee or officer of the State, county
 
12 government, or legislature:
 
13      (1)  Including:
 
14           (A)  An elective officer or a person who has served as
 
15                a member of the legislature for at least ten
 
16                years;
 
17           (B)  A per diem employee;
 
18           (C)  An officer or employee under an authorized leave
 
19                of absence;
 
20           (D)  An employee of the Hawaii national guard although
 
21                paid from federal funds;
 
22           (E)  A retired member of the employees' retirement
 
23                system, the county pension system, or the police,
 

 
Page 3                                                     1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1                firefighters, or bandsmen pension system of the
 
 2                State or county;
 
 3           (F)  A salaried and full-time member of a board,
 
 4                commission, or agency appointed by the governor or
 
 5                the mayor of a county; and
 
 6           (G)  A person employed by contract for a period not
 
 7                exceeding one year, where the director of human
 
 8                resources development, personnel services, or
 
 9                civil service has certified that the service is
 
10                essential or needed in the public interest and
 
11                that, because of circumstances surrounding its
 
12                fulfillment, personnel to perform the service
 
13                cannot be obtained through normal civil service
 
14                recruitment procedures;
 
15           and
 
16      (2)  Excluding:
 
17           (A)  A designated beneficiary of a retired member of
 
18                the employees' retirement system, the county
 
19                pension system, or the police, firefighters, or
 
20                bandsmen pension system of the State or county;
 
21           (B)  Except as allowed under paragraph (1)(G), a person
 
22                employed temporarily on a fee or contract basis;
 
23                and
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           (C)  A person employed for less than three months and
 
 2                whose employment is less than one-half of a full-
 
 3                time equivalent position.
 
 4      "Employee-beneficiary" means an employee, the beneficiary of
 
 5 an employee who is killed in the performance of the employee's
 
 6 duty, an employee who retired prior to 1961, or the beneficiary
 
 7 of a retired member of the employees' retirement system, a county
 
 8 pension system, or a police, firefighters, or bandsmen pension
 
 9 system of the State or county, upon the death of the retired
 
10 member and, which beneficiary, if a child is unmarried and under
 
11 the age of nineteen, or if a surviving spouse, does not remarry;
 
12 provided that the employee, the employee's beneficiary, or the
 
13 beneficiary of the deceased retired member is deemed eligible by
 
14 the board to receive health benefits plan or a long-term care
 
15 benefits plan.
 
16      "Fund" means the Hawaii employer-union health benefits trust
 
17 fund established in section     -2.
 
18      "Health benefits plan" means:
 
19      (1)  A group insurance contract or service agreement that
 
20           may include medical, hospital, surgical, prescribed
 
21           drugs, vision, and dental services, in which a carrier
 
22           agrees to provide, pay for, arrange for, or reimburse
 
23           the cost of medical, hospital, surgical, prescribed
 

 
Page 5                                                     1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           drugs, vision, or dental services as determined by the
 
 2           board; or
 
 3      (B)  A similar schedule of benefits established by the board
 
 4           and provided through the fund on a self-insured basis.
 
 5      "Long-term care benefits plan" means:
 
 6      (1)  A group insurance contract or service agreement in
 
 7           which a carrier agrees to provide, pay for, arrange
 
 8           for, or reimburse the cost of long-term care benefits
 
 9           as determined by the board; or
 
10      (2)  A similar schedule of benefits established by the board
 
11           and provided through the fund on a self-insured basis.
 
12      "Periodic charge" means the periodic payment by the board to
 
13 a carrier for any health benefits, or long-term care benefits
 
14 plan.
 
15      "Qualified-beneficiary" means, for purposes of the long-term
 
16 care benefits plan, a former employee or an employee who is not
 
17 eligible for benefits due to a reduction in work hours including
 
18 the employee's spouse or a divorced spouse of an employee or
 
19 retiree provided the qualified beneficiary was enrolled in the
 
20 plan prior to loss of benefits.
 
21      "Trustee" means a trustee of the board of trustees of the
 
22 Hawaii employer-union health benefits trust fund established in
 
23 section     -13.
 

 
Page 6                                                     1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1                       PART II.  TRUST FUND
 
 2      §  -2 The Hawaii employer-union health benefits trust
 
 3 fund; establishment.  There is established outside the state
 
 4 treasury, a trust fund to be known as the "Hawaii employer-union
 
 5 health benefits trust fund."  The fund shall consist of
 
 6 contributions, interest, income, dividends, refunds, rate credits
 
 7 and other returns.  The fund shall be under the control of the
 
 8 board and placed under the department of budget and finance for
 
 9 administrative purposes.
 
10      §  -3 Purpose of trust fund.(a)  The fund shall be used
 
11 for the purpose of providing employee-beneficiaries and
 
12 dependent-beneficiaries with a health benefits plan and a long-
 
13 term care benefits plan, and to pay administrative and other
 
14 expenses of the trust fund; provided that the fund, including
 
15 rate credits or reimbursements from any carrier or self-insured
 
16 plan or any earning or interest derived therefrom, and any
 
17 earnings on investments, may be used to stabilize health benefits
 
18 plan or long-term care benefits plan rates, and with the approval
 
19 of the governor and the legislature fund administrative and other
 
20 expenses necessary to effectuate these purposes.
 
21      (b)  To the extent that contributions are provided for group
 
22 life insurance benefits in sections     -4,     -5,     -6,
 

 
 
 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1     -7, and     -9, the fund may also be used for the purpose of
 
 2 providing group life insurance benefits to employees.
 
 3      (c)  To the extent that contributions are received from
 
 4 employee-beneficiaries and qualified-beneficiaries for long-term
 
 5 care insurance benefits under section     -12, the fund may also
 
 6 be used for the purpose of providing long-term care insurance
 
 7 benefits to eligible participants.
 
 8      (d)  The fund may assist the State and the counties to
 
 9 implement and administer cafeteria plans authorized under section
 
10 125 of the Internal Revenue Code of 1986, as amended, and under
 
11 part II of chapter 78.
 
12      §  -4 State and county contributions to the fund, active
 
13 employees.(a)  The State through the department of budget and
 
14 finance and the several counties through their respective
 
15 departments of finance shall pay to the fund a monthly
 
16 contribution equal to the amount established under chapter 89C or
 
17 specified in the applicable public sector collective bargaining
 
18 agreements, whichever is appropriate, for each of their
 
19 respective employee-beneficiaries and employee-beneficiaries with
 
20 dependent-beneficiaries, which shall be used toward the payment
 
21 of costs of a health benefits plan; provided that the monthly
 
22 contribution is a specified dollar amount and provided further
 
23 that the monthly contribution shall not exceed the actual cost of
 

 
Page 8                                                     1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

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

 
 
 
Page 9                                                     1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (c)  Contributions made by the State or the several counties
 
 2 shall not be considered as wages or salary of an employee-
 
 3 beneficiary, and no employee-beneficiary shall have any vested
 
 4 right in or be entitled to receive any part of any contribution
 
 5 made to the fund.
 
 6      §  -5 State and county contributions to the fund, retired
 
 7 employees.(a)  Notwithstanding any law to the contrary, this
 
 8 section shall apply to state and county contributions to the fund
 
 9 for:
 
10      (1)  The beneficiary of an employee who is killed in the
 
11           performance of duty;
 
12      (2)  An employee-beneficiary who retired after June 30,
 
13           1984, due to a disability as defined in sections 88-79
 
14           and 88-285;
 
15      (3)  An employee-beneficiary who retired before July 1,
 
16           1984;
 
17      (4)  An employee-beneficiary who:
 
18           (A)  Was hired before July 1, 1996;
 
19           (B)  Retired after June 30, 1984; and
 
20           (C)  Who had ten years or more of credited service,
 
21                excluding sick leave; and
 
22      (5)  An employee-beneficiary who was hired after June 30,
 
23           1996, and who retired with twenty-five or more years of
 

 
Page 10                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           credited service, excluding sick leave, except as
 
 2           provided in section     -9;
 
 3 or upon their death their beneficiary except as provided in
 
 4 section     -8, including employees who retired prior to 1961 and
 
 5 their beneficiaries.
 
 6      (b)  Effective July 1, 2002, there is established a base
 
 7 monthly contribution for health benefit plans which the State
 
 8 through the department of budget and finance and the several
 
 9 counties through their respective departments of finance shall
 
10 pay to the fund, up to the following:
 
11      (1)  $     for employee-beneficiaries enrolled in
 
12           supplemental medicare self plans;
 
13      (2)  $     for employee-beneficiaries enrolled in
 
14           supplemental medicare family plans;
 
15      (3)  $     for employee-beneficiaries enrolled in non-
 
16           medicare self plans; or
 
17      (4)  $     for employee-beneficiaries enrolled in non-
 
18           medicare family plans;
 
19 provided the monthly contribution shall not exceed the actual
 
20 cost of the health benefits plan or plans; and provided further
 
21 if both husband and wife are employee-beneficiaries, the total
 
22 contribution by the State or the appropriate county shall not
 

 
 
 
Page 11                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 exceed the monthly contribution of a family supplemental medicare
 
 2 or family non-medicare plan, as appropriate.
 
 3      The base composite monthly contribution shall be annually
 
 4 adjusted beginning July 1, 2003.  The adjusted base composite
 
 5 monthly contribution for each new plan year shall be calculated
 
 6 by adjusting the base composite monthly contribution in effect
 
 7 through the end of the previous plan year by the change in the
 
 8 medical care component of the Honolulu Consumer Price Index (CPI)
 
 9 for all urban consumers.  The change in the medical care
 
10 component of the CPI shall be based on the CPI reported as of
 
11 December 31st of each calendar year.
 
12      (c)  Effective July 1, 2002, there is established a base
 
13 monthly contribution of $       for each retired employee
 
14 enrolled in a group life insurance plan.  The base composite
 
15 monthly contribution shall be annually adjusted beginning July 1,
 
16 2003.  The adjusted base composite monthly contribution for each
 
17 new plan year shall be calculated by adjusting the base composite
 
18 monthly contribution in effect through the end of the previous
 
19 plan year by the change in the medical care component of the
 
20 Honolulu Consumer Price Index (CPI) for all urban consumers.  The
 
21 change in the medical care component of the CPI shall be based on
 
22 the CPI reported as of December 31st of each calendar year.
 

 
 
 
Page 12                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (d)  Contributions made by the State or the several counties
 
 2 shall not be considered as wages or salary of an employee-
 
 3 beneficiary, and no employee-beneficiary shall have any vested
 
 4 right in or be entitled to receive any part of any contribution
 
 5 made to the fund.
 
 6      §  -6 State and county contributions to the fund; retired
 
 7 employees with fewer than ten years of service.(a)  This
 
 8 section shall apply to state and county contributions to the fund
 
 9 for employees specified in section     -1(1)(E), except those
 
10 hired after June 30, 1996 under sections     -7 and     -9, who
 
11 retire after June 30, 1984, with fewer than ten years of credited
 
12 service, excluding sick leave.
 
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 equal to
 
16 one-half of the base monthly contribution set forth under section
 
17     -5(a) for retired employee's enrolled in Medicare or non-
 
18 Medicare health benefit plans.  If both husband and wife are
 
19 employee-beneficiaries, the total contribution by the State or
 
20 the appropriate county shall not exceed the monthly contribution
 
21 of a family plan for both of them.
 
22      (c)  The State through the department of budget and finance
 
23 and the several counties through their respective departments of
 

 
Page 13                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 finance shall pay to the fund a base monthly contribution as set
 
 2 forth in section     -5(c) for each retired employee enrolled in
 
 3 the fund's group life insurance benefits plan under this section.
 
 4      (d)  Contributions made by the State or the several counties
 
 5 shall not be considered as wages or salary of an employee-
 
 6 beneficiary, and no employee-beneficiary shall have any vested
 
 7 right in or be entitled to receive any part of any contribution
 
 8 made to the fund.
 
 9      §  -7 State and county contributions to the fund;
 
10 employees hired after June 30, 1996, and retired with fewer than
 
11 twenty-five years of service.(a)  This section shall apply to
 
12 state and county contributions to the fund for employees who were
 
13 hired after June 30, 1996, and who retire with fewer than twenty-
 
14 five years of credited service, excluding sick leave; provided
 
15 that this section shall not apply if an employee is hired prior
 
16 to July 1, 1996, and transfers employment after June 30, 1996 nor
 
17 to any employee who has at least ten years of credited service
 
18 and who has suffered a break in service.  For purposes of this
 
19 section "transfer" means to leave state or county employment and
 
20 return to state or  county employment within ninety calendar
 
21 days.
 
22      (b)  For purposes of this section, if an employee leaves
 
23 state or county employment and returns to state or county
 

 
Page 14                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 employment after June 30, 1996, when the employee retires, 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 base monthly contribution set forth under section
 
 8     -5(a) for retired employee's enrolled in medicare or non-
 
 9 medicare health benefit plans with ten or more years but fewer
 
10 than fifteen years of service; and seventy-five per cent of the
 
11 base monthly contribution set forth under section     -5(a) for
 
12 retired employee's enrolled in medicare or nonmedicare health
 
13 benefit plans with at least fifteen but fewer than twenty-five
 
14 years of service.  If both husband and wife are employee-
 
15 beneficiaries, the total contribution by the State or the
 
16 appropriate county, after an employee's retirement pursuant to
 
17 this section, shall not exceed the monthly contribution of a
 
18 family plan for both of them.
 
19      (d)  The State, through the department of budget and finance
 
20 and the several counties through their respective departments of
 
21 finance, shall pay to the fund a monthly contribution equal to
 
22 the base monthly contribution as set forth in section     -5(c)
 
23 for each retired employee enrolled in the fund's group life
 
24 insurance benefits plan under this section.
 

 
Page 15                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (e)  Contributions made by the State or the several counties
 
 2 shall not be considered as wages or salary of an employee-
 
 3 beneficiary, and no employee-beneficiary shall have any vested
 
 4 right in or be entitled to receive any part of any contribution
 
 5 made to the fund.
 
 6      §  -8 State and county contributions to the fund;
 
 7 employees retiring after December 31, 2001, reduced survivor
 
 8 benefits.  This section shall apply to state and county
 
 9 contributions to the fund for employees retiring after December
 
10 31, 2001.  The State through the department of budget and finance
 
11 and the several counties through their respective departments of
 
12 finance shall pay to the fund monthly contributions for the
 
13 retired employee whether enrolled in a self or family plan as
 
14 specified in sections     -5,    -6,     -7, and     -9, except
 
15 that one-half of the monthly contributions for the employee-
 
16 beneficiary or employee-beneficiary with dependent-beneficiaries
 
17 shall be paid once the employee, as specified in section
 
18     -1(1)(E), is deceased.
 
19      §  -9 State and county contributions to the fund;
 
20 employees hired after June 30, 2000, and retired.(a)  This
 
21 section shall apply to state and county contributions to the fund
 
22 for employees who were hired after June 30, 2000, and who
 
23 retired, except that this section shall not apply if an employee
 

 
Page 16                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 is hired prior to July 1, 2000, and transfers employment after
 
 2 June 30, 2000, nor to any employee who has at least ten years of
 
 3 credited service and who has suffered a break in service.  For
 
 4 the purposes of this section "transfer" means to leave state or
 
 5 county employment and return to state or county employment within
 
 6 ninety calendar days.
 
 7      (b)  For purposes of this section, if an employee leaves
 
 8 state or county employment and returns to state or county
 
 9 employment after the effective date of this Act, then the
 
10 employee's years of service shall be computed in the same manner
 
11 as set forth in chapter 88.
 
12      (c)  The State through the department of budget and finance
 
13 and the several counties through their respective departments of
 
14 finance shall pay to the fund a monthly contribution equal to
 
15 one-half of the the base medicare or non-medicare monthly
 
16 contribution set forth under section     -5(a) for retired
 
17 employees based on the self plan with ten or more years but fewer
 
18 than fifteen years of service; and seventy-five per cent of the
 
19 base medicare or non-medicare monthly contribution set forth
 
20 under section     -5(a) for retired employees based on the self
 
21 plan with at least fifteen but fewer than twenty-five years of
 
22 service; and one-hundred per cent of the base medicare or non-
 
23 medicare monthly contribution set forth under section     -5(a)
 

 
Page 17                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 for retired employees based on the self plan with twenty five or
 
 2 more years of service.  If both husband and wife are employee-
 
 3 beneficiaries, the total contribution by the State or the
 
 4 appropriate county, after an employee's retirement pursuant to
 
 5 this section, shall not exceed the monthly contribution of two
 
 6 self plans.  If the employee-beneficiary and the spouse are state
 
 7 or county retired employees, the total contribution by the State
 
 8 or the appropriate county, after an employee-beneficiary's
 
 9 retirement pursuant to this section, shall not exceed the monthly
 
10 contribution of two self plans.
 
11      (d)  The State, through the department of budget and finance
 
12 and the several counties through their respective departments of
 
13 finance, shall pay to the fund a monthly contribution equal to
 
14 the base monthly contribution as set forth in section
 
15     -5(c)for each retired employee enrolled in the fund's group
 
16 life insurance benefits plan under this section.
 
17      (e)  Contributions made by the State or the several counties
 
18 shall not be considered as wages or salary of an employee-
 
19 beneficiary, and no employee-beneficiary shall have any vested
 
20 right in or be entitled to receive any part of any contribution
 
21 made to the fund.
 
22      §  -10  Reimbursement for state contributions.  All state
 
23 agencies having control of special funds shall reimburse the
 

 
Page 18                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 State for contributions made by the State pursuant to sections
 
 2     -4,    -5,     -6,     -7,     -8, and     -9 on account of
 
 3 the employees in the agencies whose compensation is paid in whole
 
 4 or part from the special funds.  All state and county agencies
 
 5 receiving federal funds, which may be expended for the purpose of
 
 6 absorbing the contributions payable by the State to the fund,
 
 7 shall set aside a portion of the federal funds sufficient to
 
 8 reimburse the State for contributions made by the State pursuant
 
 9 to sections     -4,     -5,     -6,     -7,     -8, and     -9 on
 
10 account of the employees in the agencies whose compensation is
 
11 paid in whole or part from federal funds.
 
12      §  -11  Contributions by an employee-beneficiary for
 
13 health benefit plans.(a)  Each employee-beneficiary shall make
 
14 a monthly contribution to the fund amounting to the difference
 
15 between the monthly charge of the health benefits plan selected
 
16 by the employee-beneficiary and the State's and county's
 
17 contribution to the fund.  Nothing in this section shall prohibit
 
18 any employee-beneficiary from participating in a cafeteria plan
 
19 authorized under section 125 of the Internal Revenue Code of
 
20 1986, as amended, and part II of chapter 78.
 
21      (b)  During the period the health benefits plan selected by
 
22 an employee-beneficiary is in effect, the employee-beneficiary
 
23 shall authorize, if otherwise allowed by law, the employee-
 

 
Page 19                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 beneficiary's contribution to be withheld and transmitted to the
 
 2 fund monthly by the comptroller, employees' retirement system of
 
 3 the State of Hawaii, or finance officer who disburses the
 
 4 employee-beneficiary's compensation, pension, or retirement pay.
 
 5 If, however, an employee-beneficiary's contribution to the fund
 
 6 is not withheld and transmitted to the fund, the employee-
 
 7 beneficiary shall pay the monthly contribution:
 
 8      (1)  Directly to the fund by the first day of each month, in
 
 9           the case of an employee-beneficiary who normally
 
10           receives the employee-beneficiary's compensation from
 
11           the comptroller of the State, or employees' retirement
 
12           system of the State of Hawaii; or
 
13      (2)  In the case of all other employee-beneficiaries, to the
 
14           respective finance officer from whom the employee-
 
15           beneficiary normally receives compensation for
 
16           transmittal to the fund by the first day of each month.
 
17      (c)  Notwithstanding subsection (a) to the contrary, an
 
18 employee-beneficiary's monthly contribution to the fund,
 
19 amounting to the difference between the monthly cost of the
 
20 health benefits plan selected by the employee-beneficiary and the
 
21 State's or appropriate county's contribution to the fund, shall
 
22 be deemed to include the amount which would have been the
 

 
 
 
Page 20                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 employee-beneficiary's contribution if the employee-beneficiary
 
 2 had not elected to participate in the cafeteria plan.
 
 3      §  -12  Contributions by an employee-beneficiary or
 
 4 qualified-beneficiary for long-term care benefits plan.(a)
 
 5 During the period the long-term care benefits plan is in effect,
 
 6 the employee-beneficiary shall authorize, if otherwise allowed by
 
 7 law, the employee-beneficiary's contribution to be withheld and
 
 8 transmitted to the fund monthly by the comptroller or finance
 
 9 officer who disburses the employee-beneficiary's compensation,
 
10 pension, or retirement pay.  If, however, an employee-
 
11 beneficiary's monthly contribution to the fund is not withheld
 
12 and transmitted to the fund, the employee-beneficiary shall pay
 
13 the monthly contribution directly to the board's designated
 
14 carrier or third-party administrator by the first day of each
 
15 month.
 
16      (b)  Qualified-beneficiaries shall pay monthly contributions
 
17 directly to the board's designated carrier or third-party
 
18 administrator by the first day of each month.
 
19                   PART III.  BOARD OF TRUSTEES
 
20      §  -13  Composition of board of trustees; establishment.
 
21 There is established the board of trustees of the Hawaii
 
22 employer-union health benefits trust fund.  The board of trustees
 
23 shall be composed of ten trustees to be appointed by the
 
24 governor, without regard to section 26-34, as follows:
 

 
Page 21                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (1)  Five trustees, one of whom shall represent retirees,
 
 2           appointed from a list of nominees submitted by
 
 3           exclusive employee representative organizations to
 
 4           represent public employees; and
 
 5      (2)  Five trustees to represent the public employer,
 
 6           including the director of human resources development,
 
 7           or a designated representative, and the director of
 
 8           finance, or a designated representative, and one
 
 9           representative of the counties on a rotational basis.
 
10      (b)  The trustees shall elect from among its members:  a
 
11 chair, a vice-chair, and a secretary-treasurer.
 
12      §  -14  Terms of trustees; vacancies.  (a)  Except for the
 
13 director of finance, the director of human resources development,
 
14 and the trustee or trustees representing the counties on a
 
15 rotational basis, the term of office of each trustee shall be
 
16 four years; provided that the trustee may be reappointed for one
 
17 additional consecutive four-year term.  The director of finance
 
18 and the director of human resources development shall serve
 
19 during the directors' terms of office as directors.  The trustee
 
20 representing the counties on a rotational basis shall be limited
 
21 to a term of four years.
 
22      (b)  Each term shall commence on January 1 and expire on
 
23 December 31.  The governor may reduce the terms of those
 

 
Page 22                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 initially appointed so as to provide, as nearly as can be, for
 
 2 the expiration of an equal number of terms at intervals of one
 
 3 year.
 
 4      (c)  A vacancy on the board of trustees shall be filled by
 
 5 appointment of the governor.  The person appointed to fill a
 
 6 vacancy shall serve for the remainder of the term of the person's
 
 7 predecessor.
 
 8      (d)  If by the end of the trustee's term a trustee is not
 
 9 reappointed or the trustee's successor is not appointed, the
 
10 trustee shall serve until the trustee's successor is appointed.
 
11      §  -15  Compensation and expenses of a trustee.  Each
 
12 trustee shall serve without compensation, but may be reimbursed
 
13 from the fund for any necessary expenses made in behalf of the
 
14 fund.
 
15      §  -16  Legal adviser.  The attorney general shall serve
 
16 as legal adviser to the board of trustees of the Hawaii employer-
 
17 union health benefits trust fund.
 
18      §  -17  Power and duties of the board of trustees.  The
 
19 board of trustees shall:
 
20      (1)  Act in an advisory capacity to the Hawaii employer-
 
21           union health benefits trust fund;
 
22      (2)  Select the members of the board of directors;
 

 
 
 
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 1      (3)  Have the authority to remove any member or members of
 
 2           the board of directors, including all of them, who do
 
 3           not perform their duties to the expectations of the
 
 4           board of trustees or for any legitimate reason;
 
 5           provided that no member of the board of directors shall
 
 6           be removed without a majority vote of the full board of
 
 7           trustees agreeing to removal.
 
 8                   PART IV.  BOARD OF DIRECTORS
 
 9      §  -18   Board of directors; establishment.(a)  There is
 
10 established the board of directors of the Hawaii employer-union
 
11 health benefits trust fund.  The board shall be composed of three
 
12 directors to be appointed by the board of trustees, without
 
13 regard to section 26-34, as follows:
 
14      (1)  One member shall have substantial experience and
 
15           knowledge in the field of health care;
 
16      (2)  One member shall have substantial experience and
 
17           knowledge of the health care insurance industry or have
 
18           a comprehensive understanding of actuarial principles;
 
19           and
 
20      (3)  One member shall have legal experience or have
 
21           substantial knowledge and experience with the Employee
 
22           Retirement Income Security Act of 1974, as amended.
 

 
 
 
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 1      (b)  The board of trustees shall select one of the board of
 
 2 directors to serve as chair of the board of directors.
 
 3      §  -19  Terms of directors; vacancies.(a)  The term of
 
 4 each director shall be for four years; provided that a director
 
 5 may be appointed for one consecutive additional four-year term.
 
 6      (b)  Any vacancy on the board of directors shall be filled
 
 7 by appointment by the board of trustees.  The person appointed to
 
 8 fill a vacancy shall serve for the remainder of the term of the
 
 9 person's predecessor.
 
10      (c)  If by the end of the trustee's term a trustee is not
 
11 reappointed or the trustee's successor is not appointed, the
 
12 trustee shall serve until the trustee's successor is appointed.
 
13      §  -20  Compensation; bonus.  (a)  Each director shall be
 
14 compensated a base rate of $      per year for services rendered.
 
15      (b)  Each director may also qualify for a bonus in addition
 
16 to the annual base rate, depending on the performance of the
 
17 fund.  The bonus shall be based on the following:
 
18      (1)  Percentage of savings accrued by employers, employee-
 
19           beneficiaries, and qualified-beneficiaries from
 
20           contributions to each health benefits plan and long-
 
21           term care benefits plan.  This amount shall be
 
22           calculated by comparing the average monthly cost of
 
23           contributions by employers, employee-beneficiaries, and
 

 
Page 25                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           qualified-beneficiaries to the Hawaii employer-union
 
 2           health benefits trust fund or the Hawaii public
 
 3           employees health fund during each fiscal year, in
 
 4           comparison to the average monthly cost of contributions
 
 5           made during the previous fiscal year;
 
 6      (2)  Percentage of savings accrued from administrative and
 
 7           investment expenses of the trust.  This amount shall be
 
 8           calculated by comparing how much is spent for
 
 9           administrative and investment expenses of the Hawaii
 
10           employer-union health benefits trust fund or the Hawaii
 
11           public employees health fund during each fiscal year,
 
12           and in comparison to the amount expended for
 
13           administrative and investment expenses during the
 
14           previous fiscal year;
 
15      (3)  Percentage of growth of the reserves of the Hawaii
 
16           employer-union health benefits trust fund.  This amount
 
17           shall be calculated on an annual basis.
 
18      (c)  The bonus for each director shall be the sum of the
 
19 following:
 
20      (1)  The percentage of savings accrued from fund
 
21           contributions under subsection (b)(1) multiplied by
 
22              ;
 

 
 
 
Page 26                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (2)  The percentage of savings accrued from administrative
 
 2           and investment expenses under subsection (b)(2)
 
 3           multiplied by    ; and
 
 4      (3)  The percentage of growth of the fund reserves under
 
 5           subsection (b)(3) multiplied by    .
 
 6      §  -21  Legal advisor.  The attorney general shall serve
 
 7 as legal advisor to the board of directors of the Hawaii
 
 8 employer-union health benefits trust fund.
 
 9      §  -22  Administration of the fund.  The board of
 
10 directors shall administer and carry out the purpose of the fund.
 
11 The board of directors shall provide quality health and other
 
12 benefit plans at a cost affordable to both the public employers
 
13 and the public employees.
 
14      §  -23  Determine health benefits plan; contract with
 
15 carriers; benefit plan eligibility.(a)  The board shall
 
16 determine the health benefits plan or plans, which shall be
 
17 excepted from the minimum group requirements of chapter 431.
 
18      (b)  The board may contract for health benefits plans or
 
19 provide health benefits through a non-insured schedule of
 
20 benefits.
 
21      (c)  The board shall determine the requirements for
 
22 eligibility under the health benefits plans.
 

 
 
 
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 1      §  -24  Determination of benefits under the group life
 
 2 benefit program or group life insurance program.  The board may
 
 3 provide benefits under a group life benefit program or group life
 
 4 insurance program to employees.
 
 5      §  -25  Determination of long-term care benefits plan;
 
 6 contract with carrier or third-party administrator.(a)  The
 
 7 board may determine the benefits of a long-term care benefits
 
 8 plan for employee-beneficiaries, or their spouses, as well as
 
 9 their parents and grandparents, and in-law parents and
 
10 grandparents, and qualified-beneficiaries.  The plan shall comply
 
11 with article 10H of chapter 431.
 
12      (b)  Notwithstanding any law to the contrary, the benefits
 
13 shall be available only to employee-beneficiaries, or their
 
14 spouses, as well as their parents and grandparents, and in-law
 
15 parents and grandparents, and qualified-beneficiaries who enroll
 
16 between the ages of twenty and eighty-five.  Eligible persons
 
17 must comply with the plan's age, enrollment, medical
 
18 underwriting, and contribution requirements.
 
19      (c)  The board may contract with a carrier to provide fully-
 
20 insured benefits or a third-party administrator to administer
 
21 self-insured benefits.
 
22      §  -26  Health benefits for part-time, temporary, and
 
23 seasonal or casual employees; provision of.(a)  The board may
 

 
Page 28                                                    1869
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 1 offer medical, hospital, and surgical benefits plans to part-
 
 2 time, temporary, and seasonal or casual employees at no cost to
 
 3 the employers.  A part-time, temporary, and seasonal or casual
 
 4 employee means a person employed for less than three months or
 
 5 whose employment is less than one-half of a full-time equivalent
 
 6 position.  The board may determine eligibility for part-time,
 
 7 temporary, and seasonal or casual employees by rules exempted
 
 8 from chapter 91 as provided in section     -33.
 
 9      (b)  The board shall determine the medical, hospital, and
 
10 surgical benefits plan, which shall be excepted from the minimum
 
11 group requirements of article 10A of chapter 431.  The medical,
 
12 hospital, and surgical benefits plan shall provide, pay for,
 
13 arrange for, or reimburse the cost of hospitalization, surgery,
 
14 medical, and may include prescribed hospital in-patient and out-
 
15 patient service and medical benefits.
 
16      (c)  The board may contract for the health benefit plans.
 
17 Each part-time, temporary, and seasonal or casual employee
 
18 enrolled for health benefits shall pay monthly contributions
 
19 directly to the board's designated carrier.  The monthly
 
20 contributions may include the carrier's administrative costs.
 
21      §  -27  Selection of a carrier or third-party
 
22 administrator for a health benefits, group life insurance, or
 
23 long-term care benefits plan.  Procurement of a carrier or third-
 

 
Page 29                                                    1869
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 1 party administrator for any benefit plan shall be exempted from
 
 2 chapter 103D.
 
 3      §  -28  Determine eligibility of employee, dependent, or
 
 4 person.  The board shall establish and adopt eligibility
 
 5 requirements to determine which employee, dependent, or person
 
 6 may qualify as an employee-beneficiary, dependent-beneficiary, or
 
 7 qualified-beneficiary, respectively; provided that a retired
 
 8 member of the employees' retirement system, a county pension
 
 9 system, or a police, firefighters, and bandsmen pension system of
 
10 the State or county, or the retired member's dependent shall be
 
11 eligible to qualify as an employee-beneficiary or dependent-
 
12 beneficiary, whether or not the retired member was actively
 
13 employed by the State or county at the time of the retired
 
14 member's retirement and whether or not the employee retired
 
15 before or after 1961.  Employees who retired prior to 1961 shall
 
16 be treated as if they were members of the fund during their
 
17 period of employment with the State or county and receive the
 
18 same benefits as other members.  Only an employee-beneficiary or
 
19 dependent or person satisfying the eligibility requirements may
 
20 qualify as an employee-beneficiary, dependent-beneficiary, or
 
21 qualified-beneficiary.
 
22      §  -29  Information and enrollment.(a)  The board shall
 
23 make available to each employee-beneficiary summary information
 

 
Page 30                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 on approved benefit plans.  The information plans shall be
 
 2 distributed to each employee-beneficiary at the same time and in
 
 3 the same manner.
 
 4      (b)  The board shall establish conditions for benefit plan
 
 5 enrollments.
 
 6      §  -30  Supplemental plan to federal Medicare.  Any other
 
 7 provision of this chapter notwithstanding, the board shall
 
 8 establish a health benefit plan which takes into account benefits
 
 9 available to an employee-beneficiary and spouse under the federal
 
10 Medicare plan, subject to the following conditions:
 
11      (1)  There shall be no duplication of benefits payable under
 
12           federal Medicare, but the plan so established by the
 
13           board, when it is determined to be secondary to the
 
14           federal Medicare plan, will supplement the federal
 
15           Medicare plan such that when this plan is combined with
 
16           federal Medicare, and any other plan to which this plan
 
17           is subordinate under the coordination of benefit rules
 
18           as determined by the National Association of Insurance
 
19           Commissioners, the combination of this plan and all
 
20           other plans will approximate the benefits payable to a
 
21           similarly situated beneficiary not eligible for the
 
22           federal Medicare plan;
 

 
 
 
Page 31                                                    1869
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 1      (2)  The State through the department of budget and finance
 
 2           and the several counties through their respective
 
 3           departments of finance shall pay to the fund a monthly
 
 4           contribution of $45.50 or the federal Medicare plan
 
 5           rate, whichever is less for voluntary medical insurance
 
 6           coverage under federal Medicare for each employee-
 
 7           beneficiary who is a retired employee, and spouse while
 
 8           the employee-beneficiary is living, including members
 
 9           of the old pension system and after death the employee-
 
10           beneficiary's spouse if the spouse qualifies as an
 
11           employee-beneficiary;
 
12      (3)  The benefits available under the plan, when taken
 
13           together with the benefits available under the federal
 
14           Medicare plan or any other coverage or plan to which
 
15           this plan is subordinate under the coordination of
 
16           benefit rules as determined by the National Association
 
17           of Insurance Commissioners, the combination of this
 
18           plan and all other plans will approximate the benefits
 
19           that would be payable to a similarly situated
 
20           beneficiary not eligible for the federal Medicare plan;
 
21      (4)  Notwithstanding any law to the contrary, all employee-
 
22           beneficiaries or dependent-beneficiaries who are
 
23           eligible to enroll in the federal Medicare Part B
 

 
Page 32                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           medical insurance plan shall enroll in that federal
 
 2           plan as a requirement to receive the contributions and
 
 3           to participate in the employee benefit plans described
 
 4           in this chapter.  This paragraph shall pertain to
 
 5           retired employees and their spouses and the surviving
 
 6           spouses of deceased retirees and employees killed in
 
 7           the performance of duty; and
 
 8      (5)  The board shall determine which employee-beneficiaries
 
 9           and dependent-beneficiaries, who are not enrolled in
 
10           the federal Medicare Part B medical insurance plan, may
 
11           participate in such other plans as are set forth in
 
12           section     -23.
 
13      §  -31  Other powers.  In addition to the power to
 
14 administer the fund, the board may:
 
15      (1)  Collect, receive, deposit, and withdraw money on behalf
 
16           of the fund;
 
17      (2)  Invest funds in the same manner specified in section
 
18           88-119(1)(a), (1)(b), (1)(c), (2), (3), (4), (5), (6),
 
19           and (7);
 
20      (3)  Hold, purchase, sell, assign, transfer, or dispose of
 
21           any securities and investments in which the fund shall
 
22           have been invested, as well as the proceeds of the
 
23           investments and any monies belonging to the fund;
 

 
Page 33                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (4)  Appoint and at pleasure dismiss staff.  Such staff
 
 2           shall be exempt from chapters 76 and 77 and shall serve
 
 3           under and at the pleasure of the board; and
 
 4      (5)  Make payments of periodic charges and pay for
 
 5           reasonable expenses incurred to:
 
 6           (A)  Perform financial audits of the fund and claims
 
 7                audits of its insurance carriers; or
 
 8           (B)  Carry out the purposes of the fund;
 
 9      (6)  Without the necessity of complying with the
 
10           requirements of chapter 103D, retain auditors,
 
11           actuaries, investment firms and managers, benefit plan
 
12           consultants, or other professional advisors to carry
 
13           out the purposes of this chapter;
 
14      (7)  Establish health benefit plan and long-term care
 
15           benefit plan rates that include administrative and
 
16           other expenses necessary to effectuate the purposes of
 
17           the fund; or
 
18      (8)  Require any department, agency, or employee of the
 
19           State and county to furnish information to the board to
 
20           carry out the purposes of this chapter.
 
21      §  -32  Other duties.  The board shall:
 
22      (1)  Authorize charges and payments from the fund only upon
 
23           vouchers countersigned by the chairperson and such
 
24           other person as may be designated by the board;
 

 
Page 34                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (2)  Maintain accurate records and accounts of all financial
 
 2           transactions of the fund that shall be audited annually
 
 3           and summarized in an annual report to the Governor and
 
 4           legislature;
 
 5      (3)  Maintain suitable and adequate records and provide
 
 6           information requested by the State and county employers
 
 7           as necessary to carry out the purpose of the fund; and
 
 8      (4)  Procure fiduciary liability insurance and error and
 
 9           omissions coverage for all trustees and a fidelity bond
 
10           of a reasonable amount for the chairperson and any
 
11           other person authorized to handle money of the fund.
 
12      §  -33  Rules; policies and standards.(a)  Whenever the
 
13 board is required to or finds it necessary to prescribe rules for
 
14 the purposes of this chapter, the rules shall be prescribed,
 
15 without regard to chapter 91.  The procedures for rulemaking
 
16 shall be as set forth in rules, which shall minimally provide
 
17 for:
 
18      (1)  Consultation on proposed rules with employers and
 
19           affected employee organizations;
 
20      (2)  Adoption of rules at open meetings that permit the
 
21           attendance of any interested person;
 
22      (3)  Approval of rules by the governor; and
 
23      (4)  Filing of rules with the lieutenant governor.
 

 
Page 35                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (b)  The board may also issue policies, standards, and
 
 2 procedures consistent with its rules.
 
 3      §  -34  Meetings; notice; quorum; voting power; records
 
 4 and minutes.  (a)  The chairperson may call a meeting of the
 
 5 board at any time by giving at least seven days' written notice
 
 6 of the time and place of the meeting to all other directors.  Any
 
 7 director may call a meeting of the board by giving at least ten
 
 8 days' written notice of the time and place to the other
 
 9 directors.  A meeting of the board may be called at any time
 
10 without notice if all directors agree.
 
11      (b)   A quorum shall consist of three directors.
 
12      (c)  Each director shall have one vote.  Any action taken
 
13 shall be by a simple majority.
 
14      (d)  The board shall keep records and minutes of all
 
15 meetings of the board."
 
16      SECTION 2.  Chapter 87, Hawaii Revised Statutes, is
 
17 repealed.
 
18      SECTION 3.  Effective July 1, 2002, all positions and
 
19 employees of the Hawaii public employees health fund who are
 
20 subject to chapter 76 and 77, Hawaii Revised Statutes, shall be
 
21 transferred to the Hawaii employer-union health benefits trust.
 
22 All officers and employees whose functions are transferred by
 
23 this Act shall be transferred with their functions and shall
 

 
Page 36                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 continue to perform their regular duties upon their transfer,
 
 2 subject to the state personnel laws and this Act.
 
 3      All civil service positions and incumbents of the Hawaii
 
 4 public employees health fund transferred by this Act shall remain
 
 5 in the civil service and subject to chapters 76 and 77, Hawaii
 
 6 Revised Statutes, provided that in the event the civil service
 
 7 administrator position becomes vacant prior to July 1, 2002, its
 
 8 successor shall be appointed pursuant to section 87-28, Hawaii
 
 9 Revised Statutes, as amended in section 2 of this Act.  When such
 
10 positions are vacated on or after July 1, 2002, the positions
 
11 shall be exempt from civil service and prospective appointments
 
12 shall be made pursuant to section 1 of this Act.
 
13      No officer or employee of the State having tenure shall
 
14 suffer any loss of salary, seniority, prior service credit,
 
15 vacation, sick leave, or other employee benefit or privilege as a
 
16 consequence of this Act, and such officer or employee may be
 
17 transferred or appointed to a civil service position without the
 
18 necessity of examination; provided that the officer or employee
 
19 possesses the minimum qualifications for the position to which
 
20 transferred or appointed; and provided that subsequent changes in
 
21 status may be made pursuant to the applicable civil service and
 
22 compensation laws.
 

 
 
 
Page 37                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      In the event that an office or position held by an officer
 
 2 or employee having tenure is abolished, the officer or employee
 
 3 shall not thereby be separated from public employment, but shall
 
 4 remain in the employment of the State with the same pay and
 
 5 classification and shall be transferred to some other office or
 
 6 position for which the officer or employee is eligible under the
 
 7 personnel laws of the State as determined by the head of the
 
 8 department or the governor.
 
 9      SECTION 4.  All appropriations, assets, including funds to
 
10 be refunded to employees and any funds in benefit plans and
 
11 cafeteria plans, records, equipment, machines, computer software
 
12 and hardware, files, supplies, contracts, books, papers,
 
13 documents, maps, and other personal property heretofore made,
 
14 used, acquired, or held by the Hawaii public employees health
 
15 fund shall be transferred to the Hawaii employer-union health
 
16 benefits trust, effective July 1, 2002.
 
17      SECTION 5.  The governor shall appoint all members of the
 
18 board of trustees of the Hawaii employer-union health benefit
 
19 trust no later than December 29, 2000.  Upon appointment, the
 
20 board of trustees shall appoint all three members of the board of
 
21 directors no later than July 1, 2001.  Upon appointment, the
 
22 board of directors may develop and issue rules, policies, and
 
23 procedures, and contract for health benefits plans and group life
 

 
Page 38                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 insurance plans which shall become effective on July 1, 2002.
 
 2 The board of trustees and the administrator of the Hawaii public
 
 3 employees health fund shall give necessary assistance to the
 
 4 members of the Hawaii employer-union health benefits trust during
 
 5 the transition.
 
 6      SECTION 6.  Notwithstanding chapter 103D, Hawaii Revised
 
 7 Statutes, to the contrary, the board of directors of the Hawaii
 
 8 public employees health fund under chapter 87, Hawaii Revised
 
 9 Statutes, is authorized to extend current health benefit and life
 
10 insurance plan contracts through June 30, 2002.
 
11      SECTION 7.  There is appropriated out of the general
 
12 revenues of the State of Hawaii the sum of $        or so much
 
13 thereof as may be necessary for fiscal year 2000-2001 to carry
 
14 out the purposes of this Act, including the hiring of necessary
 
15 staff; provided that:
 
16      (1)  This appropriation shall not lapse at the end of the
 
17           fiscal year for which the appropriation is made; and
 
18      (2)  All moneys from the appropriation that are unencumbered
 
19           as of June 30, 2002, shall lapse as of that date.
 
20      The sum appropriated shall be expended by the department of
 
21 budget and finance for the purposes of this Act.
 
22      SECTION 8.  Statutory material to be repealed is bracketed.
 
23 New statutory material is underscored.
 

 
Page 39                                                    1869
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      SECTION 9.  The Act shall take effect upon its approval;
 
 2 provided that:
 
 3      (1)  Section 2 shall take effect on July 1, 2002;
 
 4      (2)  Section 7 shall take effect on July 1, 2000; and
 
 5      (3)  All rules governing the Hawaii public employees health
 
 6           fund under chapter 87, Hawaii Revised Statutes, if not
 
 7           contrary to this Act, shall remain in effect until such
 
 8           time that the Hawaii employer-union health benefits
 
 9           trust adopts new rules.