Report Title:
PEHF; Contributions Cap; Appropriation; Collective Bargaining
Description:
Limits state and county contributions for public health benefits expenditures to the amount appropriated in fiscal year 2001-2002; provided that any amounts subject to a collective bargaining agreement in effect on July 1, 2001, shall be appropriated until the expiration of the collective bargaining agreement. (SB1046 HD1)
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THE SENATE |
S.B. NO. |
1046 |
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TWENTY-FIRST LEGISLATURE, 2001 |
S.D. 1 |
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STATE OF HAWAII |
H.D. 1 |
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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:
SECTION 1. The legislature finds that the State and the counties face an unfunded liability for payment of health benefits for their public employees of a high of $24,800,000,000 for 2013, as projected by the auditor in its 1999 Actuarial Study and Operational Audit of the Hawaii Public Employees Health Fund. Low and intermediate estimates are not much lower and range from $7,900,000,000 to $11,400,000,000. As of 1998, the unfunded liability for the public employees health fund has already reached a high of $7,400,000,000 with low and intermediate projections of $3,600,000,000 and $4,500,000,000.
Currently, the system of providing health benefits to public employees operates by paying for certain statutorily specified benefits, regardless of the cost. In the past, when health care costs were minimal and health benefits were not considered a significant component of a worker's compensation, this was not an issue. However, as more advanced treatment, procedures, and medications are developed, their costs have also increased. Health benefits are now considered an extremely important part of a worker's compensation precisely because health care now costs so much. In addition, as more workers begin to live longer and as they learn to demand to use more benefits, the system is proving unable to keep up. The reality is that the State and the counties will be unable to pay for health benefits for their employees in the future without seriously cutting from other portions of governmental budgets if no changes are made.
The purpose of this Act is to institute a de facto ceiling on public expenditures for health benefits for public employees by limiting the provision of benefits to appropriations made. Given a definite budget within which to work, the public employees health fund will be given flexibility to provide health benefits to public employees. If the legislature should allow benefit levels and type of benefits to be subject to collective bargaining, the public employees health fund would be subject to and limited by either legislative appropriations or collective bargaining, whichever is appropriate.
SECTION 2. Section 87-4, Hawaii Revised Statutes, is amended by amending subsections (a), (b), and (c) to read as follows:
"(a) The State, through the department of budget
and finance, and the several counties, through their respective
departments of finance, shall pay to the fund [a monthly
contribution equal to the amount established under chapter 89C
or specified in the applicable public sector collective
bargaining agreement, whichever is appropriate,] no more than
the amount appropriated for this purpose in fiscal year 2001-
2002 for each of their respective employee-beneficiaries and
employee-beneficiaries with dependent-beneficiaries, which shall
be used toward the payment of costs of a health benefits plan;
provided that the monthly contribution shall not exceed the
actual cost of a health benefits plan[.]; provided that any
amounts subject to a collective bargaining agreement in effect
on July 1, 2001, shall be appropriated until the expiration of
the collective bargaining agreement.
If both husband and wife are employee-beneficiaries, the total contribution by the State or the appropriate county shall not exceed the monthly contribution of a family plan for both of them.
If, however, the State or any of the several counties establish cafeteria plans in accordance with section 125 of the Internal Revenue Code of 1986, as amended, and part II of chapter 78, the monthly contribution to the fund for those employee-beneficiaries who participate in a cafeteria plan shall be made through the cafeteria plan. In this event, the payments made by the State or the counties shall include the State's and the counties' respective contributions to the fund and the employee-beneficiary's share of the cost of the health benefits plan selected and authorized by the employee-beneficiary through the cafeteria plan.
(b) The State, through the department of budget and
finance, and the several counties, through their respective
departments of finance, shall pay to the fund [a monthly
contribution equal to the amount established under chapter 89C
or specified in the applicable public sector collective
bargaining agreement, whichever is appropriate,] no more than
the amount appropriated for this purpose in fiscal year 2001-
2002 for each child who has not attained the age of nineteen of
all employee-beneficiaries who are enrolled for dental
benefits[.]; provided that any amounts subject to a collective
bargaining agreement in effect on July 1, 2001, shall be
appropriated until the expiration of the collective bargaining
agreement. The contributions shall be used [towards] toward the
payment of costs of dental benefits of a health benefits plan.
Notwithstanding any [provisions] other provision to the contrary, no part of the fund shall be used to finance the contributions except a rate credit or reimbursement or earnings or interest therefrom received by the fund or general revenues appropriated for that purpose.
(c) The State, through the department of budget and
finance, and the several counties, through their respective
departments of finance, shall pay to the fund [a monthly
contribution equal to the amount established under chapter 89C
or specified in the applicable public sector collective
bargaining agreement, whichever is applicable,] no more than the
amount appropriated for this purpose in fiscal year 2001-2002
for each of their respective employees, to be used [towards]
toward the payment of group life insurance benefits for each
employee[.]; provided that any amounts subject to a collective
bargaining agreement in effect on July 1, 2001, shall be
appropriated until the expiration of the collective bargaining
agreement."
SECTION 3. Section 87-27, Hawaii Revised Statutes, is amended to read as follows:
"§87-27 Supplemental plan to federal Medicare. Any other provision of this chapter notwithstanding, the board of trustees shall establish, effective July 1, 1966, a health benefits plan which takes into account benefits available to an employee-beneficiary and spouse under the federal Medicare plan, subject to the following conditions:
(1) There shall be no duplication of benefits payable under federal Medicare but the plan so established by the board shall be supplemental to the federal Medicare plan;
(2) The contribution for voluntary medical insurance coverage under federal Medicare may be paid by the fund, in such manner and in an amount as the board shall specify, in the case of an employee-beneficiary who is a retired employee, and spouse while the employee-beneficiary is living, including members of the old pension system and after death the employee-beneficiary's spouse provided the spouse qualifies as an employee-beneficiary; provided that the counties, through their respective departments of finance, shall reimburse the fund for any contributions made for county employee-beneficiaries under this paragraph;
(3) The benefits available under the plan, when taken together with the benefits available under the federal Medicare plan, as nearly as is possible, shall approximate the benefits available under the plans set forth in section 87-22. If, for any reason, a situation develops where the benefits available under the supplemental plan and the federal Medicare plan substantially differ from those that would otherwise be available, the board may correct this inequity to assure substantial equality of benefits;
(4) Notwithstanding any other law to the contrary, all employee-beneficiaries or dependent-beneficiaries who are eligible to enroll in the federal Medicare Part B medical insurance plan shall enroll in that federal plan as a requirement to receive the contributions and to participate in the employee benefit plans described in this chapter. This paragraph shall pertain to retired employees and their spouses and the surviving spouses of deceased retirees and employees killed in the performance of duty; [and]
(5) The board of trustees shall determine which employee-beneficiaries and dependent-beneficiaries, who are not enrolled in the federal Medicare Part B medical insurance plan, may participate in such other plans as are set forth in section 87-22[.]; and
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect on July 1, 2001.