Report Title:

Public Employee Health Benefits; Employer Contributions

Description:

Requires the EUTF to reimburse the retiree for any cost differential due to a rate increase in the medicare part B medical insurance plan within thirty days of the rate change. Establishes a schedule of caps on the base monthly employer contributions for health benefit plans for employee-beneficiaries effective July 1, 2004; requires the base composite monthly contribution to be adjusted annually beginning July 1, 2005. Requires the State to pay to the Employer-Union Health Benefits Trust Fund (EUTF) a contribution equal to an amount not less than the medicare part B premium for voluntary medical insurance coverage under medicare for retirees. (CD1)

THE SENATE

S.B. NO.

789

TWENTY-SECOND LEGISLATURE, 2003

S.D. 1

STATE OF HAWAII

H.D. 2

C.D. 1

A BILL FOR AN ACT

 

RELATING TO PUBLIC EMPLOYEE HEALTH BENEFITS.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Section 87A-23, Hawaii Revised Statutes, is amended to read as follows:

"[[]§87A-23[]] Health benefits plan supplemental to medicare. The board shall establish a health benefits plan, which takes into account benefits available to an employee-beneficiary and spouse under medicare, subject to the following conditions:

(1) There shall be no duplication of benefits payable under medicare. The plan under this section, which shall be secondary to medicare, when combined with medicare and any other plan to which the health benefits plan is subordinate under the National Association of Insurance Commissioners' coordination of benefit rules, shall provide benefits that approximate those provided to a similarly situated beneficiary not eligible for medicare;

(2) The State, through the department of budget and finance, and the counties, through their respective departments of finance, shall pay to the fund a contribution equal to [$50.00 per month, or such other amount to be determined by the board,] an amount not less than the medicare part B premium, for voluntary medical insurance coverage under medicare for retired members of the employees' retirement system; county pension system; or a police, firefighters, or bandsmen pension system of the State or a county as set forth in chapter 88[.]; provided that if the amount reimbursed by the fund to the retiree is less than the actual cost of the medicare part B medical insurance plan due to an increase in the medicare part B medical insurance plan rate, the fund shall reimburse the retiree for the cost increase within thirty days of the rate change. The contribution shall be made for each:

(A) Employee-beneficiary who is a retired employee;

(B) Employee-beneficiary's spouse while the employee-beneficiary is living; and

(C) The employee-beneficiary's spouse, after the death of the employee-beneficiary, if the spouse qualifies as an employee-beneficiary;

(3) The benefits available under this plan, when combined with benefits available under medicare or any other coverage or plan to which this plan is subordinate under the National Association of Insurance Commissioners' coordination of benefit rules, shall approximate the benefits that would be provided to a similarly situated employee-beneficiary not eligible for medicare;

(4) All employee-beneficiaries or dependent-beneficiaries who are eligible to enroll in the medicare part B medical insurance plan shall enroll in that plan as a condition of receiving contributions and participating in benefits plans under this chapter. This paragraph shall apply to retired employees, their spouses, and the surviving spouses of deceased retirees and employees killed in the performance of duty; and

(5) The board shall determine which of the employee-beneficiaries and dependent-beneficiaries, who are not enrolled in the medicare part B medical insurance plan, may participate in the plans offered by the fund."

SECTION 2. Section 87A-33, Hawaii Revised Statutes, is amended to read as follows:

"[[]§87A-33[]] State and county contributions; retired employees. (a) Notwithstanding any law to the contrary, this section shall apply to state and county contributions to the fund for:

    1. The dependent-beneficiary of an employee who is killed in the performance of duty;
    2. A dependent-beneficiary, upon the death of the employee-beneficiary, except as provided in section 87A-36;
    3. An employee-beneficiary who retired after June 30, 1984, due to a disability falling within sections 88-79 and 88-285;
    4. An employee-beneficiary who retired before July 1, 1984;
    5. An employee-beneficiary who:

      6. (A) Was hired before July 1, 1996;

      (B) Retired after June 30, 1984; and

      (C) Who has ten years or more of credited service, excluding sick leave;

    6. An employee-beneficiary who:

      7. (A) Was hired after June 30, 1996; and

      (B) Retired with twenty-five or more years of credited service, excluding sick leave, except as provided in section 87A-36; and

    7. Employees who retired prior to 1961 and their dependent-beneficiaries.

(b) Effective July 1, 2003, there is established a base monthly contribution for health benefit plans that the State, through the department of budget and finance, and the counties, through their respective departments of finance, shall pay to the fund, up to the following:

    1. $218 for each employee-beneficiary enrolled in supplemental medicare self plans;
    2. $671 for each employee-beneficiary enrolled in supplemental medicare family plans;
    3. $342 for each employee-beneficiary enrolled in non-medicare self plans; and
    4. $928 for each employee-beneficiary enrolled in non-medicare family plans.

The monthly contribution by the State or county shall not exceed the actual cost of the health benefits plan or plans. If both husband and wife are employee-beneficiaries, the total contribution by the State or county shall not exceed the monthly contribution for a supplemental medicare family or non-medicare family plan, as appropriate.

(c) Effective July 1, 2004, there is established a base monthly contribution for health benefit plans that the State, through the department of budget and finance, and the counties, through their respective departments of finance, shall pay to the fund, up to the following:

(1) $254 for each employee-beneficiary enrolled in supplemental medicare self plans;

(2) $787 for each employee-beneficiary enrolled in supplemental medicare family plans;

(3) $412 for each employee-beneficiary enrolled in non-medicare self plans; and

(4) $1,089 for each employee-beneficiary enrolled in non-medicare family plans.

The monthly contribution by the State or county shall not exceed the actual cost of the health benefit plan or plans and shall not be required to cover increased benefits above those initially contracted for by the fund for plan year 2004-2005. If both husband and wife are employee-beneficiaries, the total contribution by the State or county shall not exceed the monthly contribution for a supplemental medicare family or non-medicare family plan, as appropriate.

[(c)] (d) The base composite monthly contribution shall be adjusted annually, beginning July 1, [2004.] 2005. The adjusted base composite monthly contribution for each new plan year (July 1 until June 30) shall be calculated by increasing or decreasing the base composite monthly contribution in effect through the end of the previous plan year by the percentage increase or decrease in the medicare part B premium rate for those years, which percentage shall be calculated by dividing the medicare part B premium rate in effect at the beginning of the new plan year by the rate in effect [through the end] at the beginning of the previous plan year.

For the plan year beginning July 1, 2005, the adjusted base monthly contribution shall be computed using the actual contracted premium rate as of July 1, 2004, for medicare and non-medicare, self and family health benefit plans with the highest actual contracted premium rate as of July 1, 2004.

As used in this subsection, "medicare part B premium rate" means the rate published in the Federal Register each year on November 1 or on the business day closest to November 1 of each year after the medicare part B premium rate has been established by the Secretary of Health and Human Services and approved by the United States Congress."

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

SECTION 4. This Act shall take effect on July 1, 2003.