REPORT TITLE:
Medical Savings Accounts


DESCRIPTION:
Establishes medical care savings accounts in the public employees
health fund for health care needs for state and county employees.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2221
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO MEDICAL SAVINGS ACCOUNTS IN 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 part to be appropriately designated and to read
 
 3 as follows:
 
 4                "PART   .  MEDICAL SAVINGS ACCOUNTS
 
 5      §87-     Definitions.  As used in this part:
 
 6      "Account administrator" means a state or federally chartered
 
 7 bank, savings bank, savings and loan association, credit union,
 
 8 or trust company authorized to act as a fiduciary; or a third
 
 9 party administrator licensed by the commissioner of financial
 
10 institutions.
 
11      "High-deductible health plan" means a health plan which in
 
12 the case of employee-only coverage, has an annual deductible of
 
13 $1,500 and annual out-of-pocket expenses not in excess of $3,000;
 
14 and in the case of employee and dependents coverage has an annual
 
15 deductible of $3,000 and annual out-of-pocket expenses not in
 
16 excess of $5,500.
 
17      "Medical savings account" means a trust created or organized
 
18 by the public employees health fund exclusively for the purpose
 
19 of paying the qualified medical expenses of an employee and the
 

 
Page 2                                                     2221
                                     H.B. NO.           
                                                        
                                                        


 1 employee's dependents.
 
 2      "Medical savings account plan" means a plan that includes:
 
 3      (1)  The purchase by the public employees health fund of a
 
 4           high-deductible health plan for the benefit of an
 
 5           employee and the employee's dependents;
 
 6      (2)  The payment of moneys on behalf of an employee into a
 
 7           medical savings account by the employer of that
 
 8           employee; and
 
 9      (3)  An account administrator to administer the medical
 
10           savings accounts and the reimbursement of qualified
 
11           medical expenses therefrom.
 
12      "Qualified medical expenses" means amounts paid by or on
 
13 behalf of an employee for medical care, defined as expenses
 
14 covered under a high-deductible health plan, for the employee or
 
15 the employee's dependents, but only to the extent the amounts are
 
16 not compensated for by insurance or otherwise.
 
17      §87-     Medical savings accounts; established.  The public
 
18 employees health fund shall establish a medical savings account
 
19 plan option and shall establish rules that may be deemed
 
20 reasonable and necessary for the administration of a medical
 
21 savings plan.
 
22      §87-   Medical savings accounts; purchase of high-
 
23 deductible health plan required.  In order to establish a medical
 

 
Page 3                                                     2221
                                     H.B. NO.           
                                                        
                                                        


 1 savings account plan, the public employees health fund shall
 
 2 purchase a high-deductible health plan that provides basic
 
 3 benefits, extended basic benefits, and major medical expense
 
 4 benefits by indemnifying eligible employees for covered health
 
 5 care services and supplies through payments to providers or
 
 6 reimbursements to participants.
 
 7      §87-   Public employees health fund; duties with regard to
 
 8 medical savings accounts.  For each employee who elects the
 
 9 medical savings account plan, the public employees health fund
 
10 shall establish with an account administrator a medical savings
 
11 account into which, on the first day of each calendar year, or on
 
12 the date of enrollment in the program; as the case may be, the
 
13 employer of the employee shall make a payment on behalf of the
 
14 employee.  At the end of each calendar year, the account
 
15 administrator shall remit to each covered employee the balance
 
16 remaining in the individual employee's medical savings account.
 
17      §87-     Use of medical savings accounts.(a)  An account
 
18 administrator shall use the funds held in a medical savings
 
19 account solely for the purpose of paying the qualified medical
 
20 expenses of the employee or the employee's dependents.
 
21      (b)  The employee may submit documentation for qualified
 
22 medical expenses paid by on behalf of the employee during a
 
23 calendar year to the account administrator, and the account
 

 
Page 4                                                     2221
                                     H.B. NO.           
                                                        
                                                        


 1 administrator shall reimburse the employees for the qualified
 
 2 medical expenses out of the medical savings account.
 
 3      (c)  Upon the death of the employee, the account
 
 4 administrator shall distribute the balance of the medical savings
 
 5 account to the estate of the employee, unless the employee has
 
 6 designated a beneficiary in writing to the account administrator,
 
 7 in which case the account administrator shall make the
 
 8 distribution to the designated beneficiary."
 
 9      SECTION 2.  This Act shall take effect upon it approval.
 
10 
 
11                           INTRODUCED BY:  _______________________