Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Labor and Public Employment, to which was referred H.B. No. 1062 entitled:

begs leave to report as follows:

The purpose of this bill is to discontinue health fund reimbursements for Medicare part B premiums to public employees who retire on or after July 1, 2001, and their spouses.

The Department of Budget and Finance supported the intent of the bill to contain costs, but wanted reimbursements to continue. Testimony in opposition was submitted by HGEA and UPW.

Currently, the public employees health fund reimburses retired public employees for the amounts paid for voluntary Medicare B insurance premiums. If this practice is continued, the Auditor has predicted the State and counties' unfunded employer liability for 2013 will be at least $1,100,000,000. Your Committee believes that this bill presents a fiscally prudent step to avoid such liability.

As affirmed by the record of votes of the members of your Committee on Labor and Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1062 and recommends that it pass Second Reading and be referred to the Committee on Finance.