STAND. COM. REP. NO. 509-04
Honolulu, Hawaii
, 2004
RE: S.B. No. 1322
S.D. 1
H.D. 1
Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twenty-Second State Legislature
Regular Session of 2004
State of Hawaii
Sir:
Your Committee on Health, to which was referred S.B. No. 1322, S.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO TAXATION OF PREMIUMS,"
begs leave to report as follows:
The purpose of this bill is to encourage competition in the health insurance market by eliminating the premium tax on health insurers.
The Department of Commerce and Consumer Affairs, Department of Labor and Industrial Relations, Department of Taxation, Hawaii Medical Association, Times Super Market, Hawaii Transportation Association, H2O Transportation, Hawaii Financial Store, Inc., PSH Insurance, Olsten Staffing Services, ProService Hawaii, Akahi Services, Inc., CTA Staffing, and several concerned individuals testified in support of this measure. Kaiser Permanente supported the intent of this bill. Tax Foundation of Hawaii provided comments.
Your Committee finds that the cost of employee health insurance coverage in Hawaii continues to rise, and it is increasingly difficult for small companies and employers to afford. The elimination of premium tax on health insurers would provide an incentive for health insurers from outside of Hawaii to enter the market, and the competition between insurers will allow the cost of health insurance to stabilize.
Your Committee has amended this bill by:
(1) Requiring the insurer to maintain an office in Hawaii for at least 200 consecutive days prior to application for a tax exemption;
(2) Requiring the Hawaii office to be comprised of employees that are at least 80 percent residents of Hawaii;
(3) Defining "health care plan contract";
(4) Removing the reference to "prepaid" with regard to health plan contracts; and
(5) Making technical, nonsubstantive amendments for clarity and style.
As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1322, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1322,
S.D. 1, H.D. 1, and be referred to the Committee on Consumer Protection and Commerce.
Respectfully submitted on behalf of the members of the Committee on Health,
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____________________________ DENNIS A. ARAKAKI, Chair |
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