Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 759, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to exclude administrative expenses from the calculation of public employee health and long-term care plan rates.

Your Committee finds that the recently established Hawaii Employer-Union Health Benefits Trust Fund is responsible for approximately $550 million in annual revenues and represents 90,000 active and retired public employees. Your Committee concurs with the findings of the Committee on Labor, that greater administrative costs will be incurred during the initial implementing stages of the trust fund and that such costs should eventually decrease. Nonetheless, these costs should not be the responsibility of public employees. Thus, this bill removes administrative expenses from the calculation of public employee health and long-term care plan rates.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 759, S.D. 1, and recommends that it pass Third Reading.