Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Labor, 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.

Testimony in support of the measure was received from the Public Employees Health Fund, the Hawaii Government Employees Association, and the United Public Workers.

Your Committee finds that during 1992-1996, the Public Employees Health Fund received $60 million 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 million to the State and counties as the employers' share of the insurance carrier refunds. The remainder, with interest, totals $24 million 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 Public Employees 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.

Your Committee believes that the refunded moneys should be disbursed to the employees and former employees who were members of the Health Fund when the refunds occurred.

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1048 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.