REPORT TITLE:
Public Employees Health Fund


DESCRIPTION:
Requires carriers who receive overpayments from the public
employees health fund to return them to the State or county at
the carrier's earliest possible opportunity, subject to the
payment of penalties.  Requires contracts entered into between
the fund and a carrier to specify that payments shall be made on
a monthly basis to carriers and shall be audited annually.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           2125
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   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.  The legislature finds that the public employees
 
 2 health fund routinely overpays carriers for their services to
 
 3 employee-beneficiaries and dependent-beneficiaries.  In turn, the
 
 4 carriers often retain those funds and reinvest them before
 
 5 returning them to the appropriate state or county as rate credits
 
 6 or reimbursements, although existing law requires that these
 
 7 amounts be returned to the State or county.  Accordingly, the
 
 8 purpose of this Act is to:
 
 9      (1)  Require overpayments to be returned to the State or
 
10           county, as appropriate, at the carrier's earliest
 
11           possible opportunity;
 
12      (2)  Impose penalties on carriers that fail to return
 
13           overpayments; and
 
14      (3)  Prevent the overpayment of carriers by the public
 
15           employees health fund by requiring any contract entered
 
16           into between the fund and a carrier to specify that
 
17           payments shall be made on a monthly basis to carriers
 
18           and shall be audited annually.
 
19      SECTION 2.  Section 87-3, Hawaii Revised Statutes, is
 
20 amended by amending subsection (a) to read as follows:
 

 
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                                     S.B. NO.           2125
                                                        
                                                        


 1      "(a)  The fund shall be used for the purpose of providing
 
 2 employee-beneficiaries and dependent-beneficiaries with a health
 
 3 benefits plan and a long-term care benefits plan; provided that
 
 4 the fund, including rate credits or reimbursements from any
 
 5 carrier or self-insured plan or any earning or interest derived
 
 6 therefrom, may be used to stabilize health benefits plan or long-
 
 7 term care benefits plan rates and with approval of the
 
 8 legislature through appropriation of funds for other expenses
 
 9 necessary to effectuate these purposes.  Notwithstanding any law
 
10 to the contrary, any rate credit or reimbursement from any
 
11 carrier or self-insured plan in excess of funds used to stabilize
 
12 health benefits plan or long-term care benefits plan costs, and
 
13 for other expenses authorized by the legislature or any earning
 
14 or interest derived therefrom shall be returned to the State or
 
15 the county at the earliest possible opportunity for deposit into
 
16 the appropriate general fund if the moneys are returned from:
 
17      (1)  A plan that provides health benefits to retirees or the
 
18           surviving spouses of deceased retirees or employees
 
19           killed in the performance of their duty whose coverage
 
20           is financed in whole or in part by the State or by the
 
21           county; or
 
22      (2)  A plan that provides health benefits to employees;
 
23           provided that the amount returned to the general fund
 

 
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                                     S.B. NO.           2125
                                                        
                                                        


 1           shall be only that portion financed by the State or by
 
 2           the county on behalf of the employee[.];
 
 3 provided that any such excess rate credit or reimbursement shall
 
 4 not be reinvested, retained, or otherwise used in any way by a
 
 5 carrier before being returned to the State or county.  Any
 
 6 carrier, following appropriate notice and a public hearing, that
 
 7 fails to comply with this subsection shall be subject to a fine
 
 8 of not less than $500 and not more than $50,000.  The board shall
 
 9 adopt rules pursuant to chapter 91 to implement this subsection."
 
10      SECTION 3.  Section 87-22, Hawaii Revised Statutes, is
 
11 amended by amending subsection (b) to read as follows:
 
12      "(b)  The board may contract for the following health
 
13 benefits plans; provided that any contract entered into between
 
14 the fund and a carrier shall specify that payments shall be paid
 
15 to carriers on a monthly basis, carriers shall return all
 
16 overpayments to the State or county at the earliest possible
 
17 opportunity subject to the payment of fines, and overpayments
 
18 shall be audited annually by an independent certified public
 
19 accountant; and provided further that benefits provided under any
 
20 respective plan shall be equally available to all employee-
 
21 beneficiaries and dependent-beneficiaries selecting the plan
 
22 regardless of age, as provided for below:
 
23      (1)  An indemnity benefit plan or plans under which a
 

 
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                                     S.B. NO.           2125
                                                        
                                                        


 1           carrier agrees to pay certain sums of money not in
 
 2           excess of the actual expenses incurred for health
 
 3           services;
 
 4      (2)  A service benefit plan or plans under which payment is
 
 5           made by a carrier under contracts with physicians,
 
 6           hospitals, or other providers of health services or,
 
 7           under certain conditions, payment is made by a carrier
 
 8           to an employee-beneficiary;
 
 9      (3)  Health maintenance organization plans, which provide or
 
10           arrange health services for members on a prepaid basis,
 
11           with professional services provided by physicians
 
12           practicing individually or as a group in a common
 
13           center or centers;
 
14      (4)  Plans to offer dental benefits through an indemnity
 
15           plan or plans, a service benefit plan or plans, dental
 
16           maintenance organization plans, or combinations
 
17           thereof;
 
18      (5)  Plans to offer prescription drug benefits through an
 
19           indemnity plan or plans, a service benefit plan or
 
20           plans, health maintenance organization plans, or
 
21           combinations thereof;
 
22      (6)  Plans to offer vision care benefits through an
 
23           indemnity plan or plans, a service benefit plan or
 

 
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                                     S.B. NO.           2125
                                                        
                                                        


 1           plans, health maintenance organization plans, or
 
 2           combinations thereof; or
 
 3      (7)  A noninsured schedule of benefits similar to any of the
 
 4           schedule of benefits set forth in the health benefits
 
 5           plans authorized in paragraphs (1) to (6)."
 
 6      SECTION 4.  All contracts entered into under statutes or
 
 7 portions of statutes amended by this Act shall continue to be
 
 8 honored until their termination.  The provisions of this Act
 
 9 shall not be applied so as to impair any contract existing as of
 
10 the effective date of this Act or to otherwise be deemed to
 
11 violate either the Hawaii Constitution or Article I, section 10,
 
12 of the United States Constitution.
 
13      SECTION 5.  Statutory material to be repealed is bracketed.
 
14 New statutory material is underscored.
 
15      SECTION 6.  This Act shall take effect upon its approval.
 
16 
 
17                           INTRODUCED BY:_________________________