Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committee on Labor, to which was referred H.B. No. 2309 entitled:

begs leave to report as follows:

The purpose of this measure is to require a retired individual who receives reimbursements from the Hawaii employer-union health benefits trust fund (EUTF) for Medicare part B premiums to designate an institution of the individual's choice for direct deposit of the reimbursements beginning July 1, 2006.

This measure also amends existing statutory language for purposes of clarity.

Testimony in support of this measure was submitted by the Department of Budget and Finance, the Hawaii EUTF, and the Hawaii State Teachers Association.

Your Committee finds that advancements in technology enable the EUTF to provide retired employee-beneficiaries and their spouses with the convenience and benefits of direct electronic deposit of Medicare part B reimbursements into the retired employee-beneficiaries' or spouses' bank accounts. Your Committee further finds that, currently, retired employee-beneficiaries benefit from the employees' retirement system's similar authority to pay retirement benefits to members through direct deposits. The EUTF has already projected that the implementation of this measure will provide annual savings in the amount of approximately $30,000 in postage and mailing materials alone. Accordingly, your Committee determines that requiring direct deposit for the reimbursement of Medicare part B premiums will be instrumental in reducing postage costs, reducing the cost of handling paper checks, diminishing the potential for lost or stolen paper checks, and providing added convenience through the elimination of the physical deposit of paper checks.

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2309, and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.