Report Title:

Employer's share of prepaid health care premiums.

WHEREAS, in 1974, the Legislature enacted the Hawaii Prepaid Health Care Act (HPHCA), chapter 393, Hawaii Revised Statutes, which requires employers to provide health care coverage and allocates the premium costs between the employer and the employee; and

WHEREAS, HPHCA caps the employee's share of health care premiums to one-half of the premium cost, or 1.5 percent of their wages, whichever is less; and

WHEREAS, HPHCA requires the employer to pay at least one-half of the premium cost and provides that if the employee's contribution is less than one-half of the premium, the employer shall be liable for the entire remaining portion of the premium; and

WHEREAS, in 1974, limiting the employee's contribution to 1.5 percent of wages may have been appropriate, but the rapid increase in the cost of medical coverage has continually shifted larger portions of the premium to employers; and

WHEREAS, the State of Hawaii and the counties pay 60 percent of the premium cost of medical coverage for public employees; and

WHEREAS, there should be equity in the treatment of public and private sector employers as to the proportion of their contributions for health care premiums; and

WHEREAS, Hawaii's law appears to obligate private sector employers to pay a larger percentage of health plan premiums than the State and counties; and

WHEREAS, in 1974, Congress enacted the Employee Retirement Income Security Act (ERISA), 29 U.S.C. Sections 1001-1461; and

WHEREAS, section 504 of ERISA (29 U.S.C. Section 1144) preempts any and all state laws that related to employee benefit plans; and

WHEREAS, the State of Hawaii requested and obtained an exemption from ERISA preemption; and

WHEREAS, because of the ERISA exemption in 29 U.S.C. Section 1144(b)(5), HPHCA has remained the smae as it was September 2, 1974, and no changes can be made without Congressional approval; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-first Legislature of the State of Hawaii, Regular Session of 2001, that this body requests the members of Hawaii's Congressional Delegation to seek and support a broader exemption of the Hawaii Prepaid Health Care Act to ensure equality in the amounts paid by public and private employers for health care premiums; and

BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to each member of Hawaii's Congressional Delegation.