STAND

STAND. COM. REP. NO.953

Honolulu, Hawaii

, 2003

RE: S.B. No. 799

S.D. 1

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. 799, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO VOLUNTARY EMPLOYEES' BENEFICIARY ASSOCIATION TRUSTS,"

begs leave to report as follows:

The purpose of this measure is to authorize public employee organizations to establish voluntary employees' beneficiary association (VEBA) trusts to provide health benefits to their members.

Specifically, this bill:

(1) Exempts employees covered by VEBA trusts from mandatory participation in the Hawaii Employer-Union Health Benefit Trust (EUTF) pursuant to chapter 87A, Hawaii Revised Statutes;

(2) Allows public employee organizations that establish VEBA trusts to provide health benefits to members both during their employment and throughout their retirement years; and

(3) Provides current retirees, who were members of a public employee organization prior to their retirement, with a one-time option of electing to participate in either the Hawaii EUTF or a VEBA trust established by their public employee organization.

Your Committee finds that this measure will allow public employee organizations to establish VEBA trusts as viable alternatives to the Hawaii EUTF without any increase in cost to the State or its various counties. This measure addresses past concerns regarding the accountability of public employee organization health benefit plans by requiring greater regulation and more stringent disclosure and reporting requirements than the Hawaii EUTF. Your Committee believes that this measure will encourage increased competition and result in lower premium rates for public employee health insurance.

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. 799, S.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

		____________________________ BRIAN T. TANIGUCHI, Chair