STAND. COM. REP. NO. 926

Honolulu, Hawaii

RE:    S.B. No. 1380

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 1380 entitled:

"A BILL FOR AN ACT RELATING TO THE HAWAII EMPLOYER-UNION HEALTH BENEFITS TRUST FUND,"

begs leave to report as follows:

     The purpose of this measure is to enable the Board of Trustees of the Hawaii Employer-Union Health Benefits Trust Fund to adjust the base monthly contribution for the health benefit plans' rate structure.

     Specifically, this measure requires the base monthly contribution to health benefit plans, if the Board of Trustees adopts a rate structure for plans other than self and family rates, to provide the equivalent underwriting cost of a cost-neutral adjustment to the base monthly contribution.

     Your Committee received comments in support of this measure from the Department of Budget and Finance and the Employer-Union Health Benefits Trust Fund of the Department of Budget and Finance.

     Your Committee finds that current health benefits plans are based on a two-tier structure with a cap (base monthly contribution) on self plans and a cap on family plans.  The Board of Trustees of the Hawaii Employer-Union Health Benefits Trust Fund will utilize a three-tier rate structure so that the rates for retiree health benefits plans would correspond more to the size of a retiree's family--specifically, a two-party rather than a family rate.  This measure will provide the Board of Trustees the power to adjust the base monthly contribution accordingly in a cost-neutral manner to reflect any such change.

     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. 1380 and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

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ROSALYN H. BAKER, Chair