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 S.B. No. 759 entitled:

begs leave to report as follows:

The purpose of this measure is to exclude the inclusion of administrative costs from the establishment of health benefits plan and long-term care benefits plan rates.

Testimony in support of this measure was submitted by the Hawaii Government Employees Association, the United Public Workers of Hawaii, the Hawaii State Teachers Association, and the Hawaii State Retired Teachers Association.

Your Committee finds that greater costs will be incurred during the initial stages of implementation of the Hawaii Employer-Union Health Benefits Trust Fund (EUTF). However, your Committee believes that these administrative costs should not be passed on to the employees, although the carrier's administrative costs may be passed on to the employees.

Your Committee further finds that once the EUTF has been fully implemented, administrative costs should decrease. Therefore, your Committee has amended this measure as follows:

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 759, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 759, S.D. 1, and be referred to the Committee on Ways and Means.