STAND. COM. REP. NO. 383
Honolulu, Hawaii
, 2001
RE: S.B. No. 1044
Honorable Robert Bunda
President of the Senate
Twenty-First State Legislature
Regular Session of 2001
State of Hawaii
Sir:
Your Committees on Labor and Tourism and Intergovernmental Affairs, to which was referred S.B. No. 1044 entitled:
"A BILL FOR AN ACT RELATING TO PUBLIC EMPLOYEE HEALTH BENEFITS,"
beg leave to report as follows:
The purpose of this measure is to replace the current Hawaii Public Employees Health Fund (PEHF) with a more responsive, flexible, and cost-effective employer-union trust fund.
Your Committees received testimony supporting this measure from the Department of Budget and Finance. The United Public Workers, AFSCME, Local 646, AFL-CIO and HGEA-AFSCME supported the intent of this measure. The Office of Information Practices and Hawaii Public Employees Health Fund submitted testimony opposing this measure.
Your Committees find that increasing costs for public employee health benefits and the apparent lack of responsiveness to changing health care market conditions have raised concerns over the current governance of the PEHF. In a recent operational audit of the PEHF, the legislative auditor made recommendations to improve health benefits administration and to reduce costs. Your Committees find that this measure addresses those recommendations, meets the needs of PEHF beneficiaries, and improves on the current PEHF by, among other things:
(1) Creating an employer-union trust fund that is a single, health benefit delivery system;
(2) Retaining the same eligibility requirements for employee-beneficiaries and dependent-beneficiaries as under current statutes;
(3) Providing equal employer and employee representation through a ten-member board of trustees appointed by the governor;
(4) Providing the board of trustees greater administrative flexibility; and
(5) Containing costs by:
(A) Setting the monthly Medicare Part B reimbursement rate at $45.50 and requiring any increase to the reimbursement rate be approved by the Legislature;
(B) Reducing the employer's contributions for health benefits for surviving spouses and dependents of employees who are hired after June 30, 2001, and retire, upon the death of the retiree. Employers will contribute one-half of the applicable self or family rates for the surviving spouses and dependents of deceased retirees; and
(C) Eliminating employer contributions for dependents of employees hired on or after June 30, 2001, and who retire. The employers' contribution will be based on the individual rate.
Your Committees recognize that the subject matter contained in the measure is complex and will require further discussion in which your Committees will be involved.
As affirmed by the records of votes of the members of your Committees on Labor and Tourism and Intergovernmental Affairs that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1044 and recommend that it pass Second Reading and be referred to the Committee on Ways and Means.
Respectfully submitted on behalf of the members of the Committees on Labor and Tourism and Intergovernmental Affairs,
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____________________________ DONNA MERCADO KIM, Chair |
____________________________ BOB NAKATA, Chair |
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