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. 93 entitled:

begs leave to report as follows:

The purpose of this concurrent resolution is to request the Legislative Auditor (Auditor) to conduct a social and financial analysis of the impact medical savings accounts (MSAs) would have on the 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. Department of Labor and Industrial Relations and the Department of Commerce and Consumer Affairs 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 since loss of this exemption could jeopardize the health care of thousands of Hawaii residents.

Your Committee notes that, pursuant to section 23-51, Hawaii Revised Statutes, before any legislative measure mandating health insurance coverage for specific health services, specific diseases, or certain providers of health care services as part of individual or group health insurance policies can be considered, the Legislature must pass a concurrent resolution requesting the Auditor to prepare and submit a report to the Legislature on the social and financial effects of the proposed mandated coverage.

Your Committee respectfully requests that the Auditor request an opinion from the Attorney General as to the impact MSAs may have on PHCA and include that opinion as part of its final report of its findings and recommendations to the Legislature.

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. 93 and recommends that it be referred to the Committee on Finance.