Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Labor and Public Employment, to which was referred H.C.R. No. 92 entitled:

begs leave to report as follows:

The purpose of this concurrent resolution is to request the Department of Labor and Industrial Relations (DLIR), in conjunction with Hawaii's health plans, to explore options for providing medical savings accounts (MSAs) and high deductible health plans to Hawaii's businesses under Hawaii's Prepaid Health Care Act (PHCA).

The National Federation of Independent Business-Hawaii and Legislative Information Services of Hawaii testified in support of this measure. The Hawaii Medical Association, Hawaii Medical Service Association, and Kaiser Permanente supported the intent of this measure. DLIR opposed this measure.

Your Committee finds that health care costs in Hawaii have been steadily increasing. These increased costs have had a major impact upon businesses, especially small businesses. By allowing individuals to have more options such as MSAs and high deductible plans for their health care coverage needs, your Committee finds that health care costs may be contained. However, your Committee has concerns regarding the effect MSAs may have on the current exemption from the Employee Retirement Income Securities Act (ERISA) of PHCA despite assurances received from the Attorney General and the United States Department of Labor that MSAs would not jeopardize Hawaii's ERISA exemption. Loss of this exemption could jeopardize the health care of thousands of Hawaii residents.

Your Committee respectfully requests that, in its final report of its findings and recommendations, DLIR submit to your Committee on Labor and Public Employment, the opinion it received from the Attorney General on MSAs and their effect on PHCA.

As affirmed by the record of votes of the members of your Committee on Labor and Public Employment that is attached to this report, your Committee concurs with the intent and purpose of H.C.R. No. 92 and recommends that it be referred to the Committee on Finance.