Mandates that the prepaid health care advisory council not include a member from the insurance industry; provides for appointment of a chairperson with a limit of two four-year terms.

A BILL FOR AN ACT

SECTION 1. Existing law in section 393-7(a), Hawaii Revised Statutes, relating to approval of prepaid health care plans, requires the director of labor and industrial relations, after advice by the prepaid health care advisory council, to determine whether or not a prepaid health care plan is qualified under Hawaii law to offer benefits under chapter 393, Hawaii Revised Statutes, relating to the Prepaid Health Care Act. The legislature finds that new health plans seeking entry into Hawaii, particularly employer-sponsored health plans, have had difficulty obtaining approval from the advisory council. This gatekeeper process, though well intended, has resulted in a lack of competition in the marketplace for prepaid health care plans, with a probable impact on health insurance rates.

The federal Employee Retirement Income Security Act (ERISA), title 29 United States Code section 1144, as amended, supersedes any amendment to the Prepaid Health Care Act enacted after September 2, 1974, that provides for "more than the effective administration of such Act...". This Act does not amend substantive provisions of the Prepaid Health Care Act or impose new obligations upon employers; therefore, it is not affected by the ERISA preemption.

The purpose of this Act is to provide for more effective administration of the Prepaid Health Care Act by mandating that the prepaid health care advisory council shall not include a member from the insurance industry, and to provide for the appointment of a chairperson.

"(d) The prepaid health care advisory council shall be appointed by the director and shall include representatives of the medical and public health professions, representatives of consumer interests, and persons experienced in prepaid health care [protection.] insurance; provided that no member, including the chairperson, shall be employed by a health care insurer in the State or who serves as a consultant to such health care insurer at the time of appointment or during the member's tenure. The membership of the council shall not exceed seven individuals. There shall be a chairperson of the council to be appointed by the governor as provided in section 26-34, and shall serve for a term of four years, but in no event shall the chairperson's tenure exceed two consecutive terms."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.