Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Conference on the disagreeing vote of the Senate to the amendments proposed by the House of Representatives in S.B. No. 2355, S.D. 2, H.D. 2, entitled:

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

The purpose of this measure is to clarify the health benefits provided upon retirement to public employees who transferred or experienced a break in service before subsequently returning to state or county employment.

Specifically, this measure:

Your Committee on Conference finds that an employee, initially hired prior to July 1, 1996, who leaves and then later returns to public service, may be treated as a new employee for purposes of determining the level of health benefits to be provided upon retirement under the Hawaii Employer-Union Health Benefits Trust Fund. Although such an employee may have qualified for health benefits upon retirement that an employee who was hired prior to July 1, 1996, who has not experience a break in service, is entitled to receive, it is unclear under the current law as to how such an individual will be treated. Therefore, further clarification of the law is necessary.

Under the current law, public employees hired prior to July 1, 1996, who accrue at least ten years of credited service, are entitled to health coverage upon retirement funded entirely by the State or appropriate county. Therefore, your Committee on Conference believes that employees satisfying the aforementioned criteria, who also either transfer employment or experience a break in service, should be entitled to receive the same health benefits upon retirement as an individual who was hired before July 1, 1996, and leaves public service without returning with at least ten years of credited service. Additionally, so as not to diminish any benefits currently provided under the law, this measure ensures that public employees hired between June 30, 1996, and July 1, 2001, who transfer employment and accrue at least ten years of credited service or accrued at least ten years of credited service prior to experiencing a break in service are entitled to health coverage upon retirement which is partially funded by the State or county as provided in section 87A-35, HRS.

Based upon an opinion rendered by the Department of the Attorney General reflecting disapproval of the ramifications of the provisions of this measure, your Committee on Conference has amended this measure by:

As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of S.B. No. 2355, S.D. 2, H.D. 2, as amended herein, and recommends that it pass Final Reading in the form attached hereto as S.B. No. 2355, S.D. 2, H.D. 2, C.D. 1.