Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 1048 entitled:

begs leave to report as follows:

The purpose of this measure is to allow the Public Employees Health Fund to return the employees' share of insurance carrier refunds to beneficiaries based on their years of benefit plan participation.

Your Committee finds that during 1992-1996, the Public Employees Health Fund received $60,000,000 in refunds from insurance carriers. In 1998, the Legislature enacted Act 141, Session Laws of Hawaii 1998, which required the Health Fund to return $43,000,000 to the State and counties as the employers' share of the insurance carrier refunds. The remainder, with interest, totals $24,000,000 and represents the approximate total amount payable to state and county employees who were members of the Health Fund during that period in time.

Unfortunately, existing law does not allow the Health Fund to refund moneys to employees. Section 87-22.3, Hawaii Revised Statutes, only allows the Health Fund to use the refunded moneys to either improve benefits or reduce the employees' share of monthly contributions. This measure will enable the Health Fund to refund moneys to employees.

Your Committee has made technical nonsubstantive amendments for the purposes of clarity and style.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1048, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1048, S.D. 1.