Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committees on Labor and Transportation, Military Affairs, and Government Operations, to which was referred S.B. No. 3175 entitled:

beg leave to report as follows:

The purpose of this measure is to allow for a referendum to be held so that employees who are currently not contributing to Medicare would be given the option of participation in the Medicare system.

Testimony in support of this measure was submitted by the East-West Center, the East-West Center Employees Association, and an individual.

Your Committees find that in 1981 a referendum was held allowing employees of the East-West Center (EWC) to choose whether or not to be covered by the Social Security Act, with such decision being irrevocable. Your Committees further find that subsequently, in 1986, the Social Security Administration, in recognition of a lack of hospital insurance coverage nationwide, modified the Social Security Act to require the provision of Medicare coverage for employees hired on or after April 1, 1986, who are not covered by Social Security. However, no mechanism exists for the provision of Medicare coverage for those employees hired prior to April 1, 1986.

Therefore, your Committees determine that these employees should be afforded the opportunity to secure coverage under the Medicare system. Additionally, your Committees determine that as it is currently unaware of any other groups or employees who may be affected by this measure, and as the EWC has indicated that it is willing to fund costs incurred with regard to affected EWC employees, the appropriation contained within the measure is unnecessary.

Accordingly, your Committees have amended this measure by:

As affirmed by the records of votes of the members of your Committees on Labor and Transportation, Military Affairs, and Government Operations that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 3175, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 3175, S.D. 1, and be referred to the Committee on Ways and Means.