Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2355, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to clarify certain issues concerning qualification for health insurance benefits as retirees.

Specifically, the bill provides that certain public employees with credited service prior to July 1, 1996, who leave state or county employment but subsequently return to public service, shall qualify for the health benefits plan for retirees as it existed prior to July 1, 1996.

Your Committee finds that an employee, initially hired prior to July 1, 1996, who has left state or county employment but who has subsequently returned to public service and has otherwise qualified for the level of health benefits to which employees hired prior to July 1, 1996, would be entitled upon retirement, may be treated as an employee hired after July 1, 1996, for purposes of determining the person's health benefits as a retiree under the Hawaii Employer-Union Health Benefits Trust Fund. Because it is not clear under the current law what level of health benefits these individuals will receive upon retirement, further clarification is necessary.

Your Committee finds that public employees who were hired prior to July 1, 1996, and who accrue at least ten years of service are entitled to a health benefits plan that could be provided at no cost to the employee upon retirement. Public employees hired after July 1, 1996, who accrue less than twenty-five years of service prior to retirement are required to pay a portion of their retirement health benefits cost.

Your Committee believes that an individual hired before July 1, 1996, who transfers employment after July 1, 1996, and cumulatively accrues ten years of credited service or who accrues ten years of credited service before a break in service, is entitled to receive the same health benefits upon retirement as an individual who was hired before July 1, 1996, thereafter accrued ten years of credited service, and left public service without ever returning.

Accordingly, your Committee has amended this measure as follows:

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. 2355, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2355, S.D. 2.