Stops state payment of PEHF premiums for retired legislators elected or appointed on and after 11/5/2002; allows legislator to pay entire premium. Phases out state PEHF premium payments for legislators elected or appointed before 11/5/2002 and retiring after 10 years. State pays 100% if retire in 2002; 80% in 2004; 60% in 2006; 40% in 2008; 20% in 2010; and 0% in 2011 and thereafter.

A BILL FOR AN ACT

SECTION 1. The legislature finds that, at present, legislators who retire after ten years of service in the legislature regardless of age are entitled to payment by state government of one hundred per cent of the premium costs of hospital, medical, surgical, prescription drug, vision care, and adult dental benefits for the retired legislator and his or her dependent-beneficiaries for the life of the retired legislator. The legislature additionally finds that this retirement benefit is not affordable and not necessary to the recruitment of qualified candidates for legislative office. The legislature further finds that, in a time when the costs of government employee health benefits are multiplying rapidly and when the only practical government response is to limit government contributions, the legislature must lead by example. Finally, the legislature finds that the current structure of retired legislator health benefits can contribute in a diminishment of legislative independence and initiative. The legislature therefore believes that the current structure of retired legislator health benefits must be altered as to both existing and new legislators.

SECTION 2. Chapter 87, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§87-    Legislator elected on November 5, 2002, and thereafter who retires; legislator retiring after serving ten or more years in office. (a) This subsection shall apply to any legislator who is first elected or appointed on November 5, 2002, or thereafter, and who thereafter retires. Upon the legislator's retirement, the State, through the department of budget and finance, shall not pay to the fund any monthly contribution for any of the following benefits for a retired legislator who is subject to this subsection, or for the legislator's dependent-beneficiaries:

Any difference in monthly premium payments shall be borne by the retired legislator subject to this subsection if the retired legislator wishes to continue coverage."

SECTION 3. Section 87-4.6, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) [This] Except for any retired legislator who is first elected or appointed on November 5, 2002, and thereafter who is subject to section 87-   (a) instead, and except for any retired legislator who was first elected or appointed prior to November 5, 2002, and who retires thereafter after serving ten or more cumulative years in office and who is subject to section 87-   (b) instead, this section shall apply to state and county contributions to the fund for employees who were hired after June 30, 1996, and who retire with fewer than twenty-five years of credited service, excluding sick leave; provided that this section shall not apply if an employee is hired prior to July 1, 1996, and transfers employment after June 30, 1996, nor to any employee who has at least ten years of credited service and who has suffered a break in service. For purposes of this section, "transfer" means to leave state or county employment and return to state or county employment within ninety calendar days."

SECTION 4. Section 87-6, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) Notwithstanding any other law to the contrary:

or upon death their beneficiary, including employees who retired prior to the establishing of the fund and their beneficiaries, or the beneficiary of any employee-beneficiary, as described in section 87-1(6) shall not be required to make any contribution to the fund. The monthly contribution of the persons identified in this subsection shall be financed by the State through the department of budget and finance and the several counties through their respective departments of finance for each of their respective employee-beneficiaries."

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.