STAND. COM. REP. NO. 857

Honolulu, Hawaii

RE:    S.B. No. 1803

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committees on Commerce, Consumer Protection, and Affordable Housing and Judiciary and Labor, to which was referred S.B. No. 1803 entitled:

"A BILL FOR AN ACT RELATING TO HEALTH INSURANCE,"

beg leave to report as follows:

     The purpose of this measure is to enable small insurers, which occupy less than thirty per cent of the health insurance market, to provide the broadest health care coverage at the lowest possible rates by permitting different types of insurance to be combined into a single policy. 

     Your Committees received testimony in support of this measure from the Hawaii Management Alliance Association and the Hawaii Association of Realtors.  Testimony in opposition to this measure was received from the Department of Commerce and Consumer Affairs and the Hawaii Medical Service Association.

     Your Committees find that affordable health insurance is one of the State's most pressing concerns and that small insurers provide coverage to individuals, self-employed workers, and small business group plans that have one or few employees.  Expanding coverage options will benefit consumers and will increase competition in Hawaii.  The intent of this measure is to provide consumers with greater choices in their health insurance provider by allowing small insurers to be able to combine different types of insurance into a single policy without violating tying arrangements that are prohibited under the Insurance Code.

     Your Committees have amended this measure to promote further discussion by:

     (1)  Removing section 1 of the measure;

     (2)  Changing the requirements to allow those insurers that cover less than ten per cent of the health insurance market to offer combined insurance coverage under a single policy to small employee groups; and

     (3)  Changing the effective date.

     As affirmed by the records of votes of the members of your Committees on Commerce, Consumer Protection, and Affordable Housing and Judiciary and Labor that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1803, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1803, S.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committees on Commerce, Consumer Protection, and Affordable Housing and Judiciary and Labor,

____________________________ CLAYTON HEE, Chair

____________________________ BRIAN T. TANIGUCHI, Chair