Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

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

begs leave to report as follows:

The purpose of this measure is to request the Department of Labor and Industrial Relations (DLIR) to work in conjunction with Hawaii's health plans to explore options for providing small businesses with a Medical Savings Account (MSA) and high deductible health plan options to meet benefit levels of a prepaid health plan under the Hawaii Prepaid Health Care Act (PHCA).

Testimony in support of this measure was submitted by the Hawaii Medical Service Association. Testimony in opposition to this measure was submitted by the DLIR. The Hawaii Medical Association submitted comments on the measure.

Your Committee finds that due to the rapidly rising costs of medical insurance in Hawaii and throughout the nation, combined with the distressed state of the economy, many small businesses are unable to afford to provide health benefits to their employees. Under the PHCA, health care coverage is provided to employees through a public-private approach, wherein a defined level of health benefits must be provided pursuant to state and federal law. In addition, state and federal law have mandated additional benefits, which have resulted in increased costs to the employers.

Therefore, your Committee determines that to meet the needs of the employees as well as address the financial concerns of the employers, DLIR, together with Hawaii's health plans, should be requested to explore options for providing small businesses with medical savings accounts and high deductible health plans as alternatives to meet the requirements of the PHCA.

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee concurs with the intent and purpose of H.C.R. 92, and recommends its adoption.