STAND. COM. REP. NO. 2688

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2292
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committees on Commerce and Consumer Protection and
Health and Human Services, to which was referred S.B. No. 2292
entitled: 

     "A BILL FOR AN ACT RELATING TO INSURANCE CODE,"

beg leave to report as follows:

     The purpose of this bill is to clarify the State's
enforcement jurisdiction over federal laws relating to women's
and children's health care.

     The Health Care Financing Administration (HCFA) informed the
State that it is unclear whether Hawaii intends to retain
enforcement jurisdiction over matters related to the Newborns'
and Mothers' Health Protection Act of 1996 and the Women's Health
and Cancer Rights Act of 1998.  HCFA informed the State that by
replacing certain references to the Health Insurance Portability
and Accountability Act of 1996 (HIPAA) with references to title
42 United States Code section 300(gg), et seq., the State would
retain its enforcement jurisdiction.

     HCFA requested that section 431:2-201.5, Hawaii Revised
Statutes (HRS), indicate more clearly that group health issuers
need to offer all its group plans to small groups.  

     The bill also amends section 431:2-201.5, HRS, to clarify
that it was the State's intent to go beyond the HIPAA in the area
of prohibiting preexisting condition exclusions.  Prior to HIPAA,
the Hawaii Prepaid Health Care Act prohibited employer plans from

 
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                                   STAND. COM. REP. NO. 2688
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excluding preexisting conditions.  Your Committees find that in
1997, the Legislature intended to prohibit all group plans from
excluding preexisting conditions but due to technical terms
referring back to HIPAA defined terms, the statute was not clear. 

     After consultation with HCFA, the Insurance Division has
found another loophole in section 431:2-201.5, HRS.  Your
Committees have amended the bill to include association plans
into the term  group health issuers.  Certain association plans
are exempted from HIPAA and do not fall within group or
individual plans.  It is the intent of your Committees to include
any group and association plan that is not specifically preempted
by federal laws.  Your Committees believe that those who "fall
through the web" of health insurance coverage such as self-
employed individuals, sole proprietors, and students should
benefit by this bill.  

     Your Committees amended this bill by changing the term
"health coverage" to "health insurance coverage", which is the
term used in title 42 United States Code section 300(gg). 

     Your Committees made technical amendments to this bill to
clarify that the section applies only to health insurance and by
amending a citation in section 431:2-201.5, HRS, which was
redesignated by federal law, and to reflect existing statutory
language and preferred drafting style.   

     As affirmed by the records of votes of the members of your
Committees on Commerce and Consumer Protection and Health and
Human Services that are attached to this report, your Committees
are in accord with the intent and purpose of S.B. No. 2292, as
amended herein, and recommend that it pass Second Reading in the
form attached hereto as S.B. No. 2292, S.D. 1, and be placed on
the calendar for Third Reading.


 
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                                   STAND. COM. REP. NO. 2688
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                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Commerce and
                                   Consumer Protection and Health
                                   and Human Services,



____________________________       ______________________________
SUZANNE CHUN OAKLAND, Chair        BRIAN KANNO, CO-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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