STAND. COM. REP. NO. 390

Honolulu, Hawaii

RE:    S.B. No. 857

       S.D. 1

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Health, to which was referred S.B. No. 857 entitled:

"A BILL FOR AN ACT RELATING TO MEDICAL SAVINGS ACCOUNTS,"

begs leave to report as follows:

     The purpose and intent of this measure is to establish medical savings accounts to allow an employee to save money for eligible medical expenses and receive certain state tax benefits for funds deposited into the account.

     Your Committee received testimony in support of this measure from the Hawaii Medical Association.  Your Committee received testimony in opposition to this measure from the Department of Taxation.  Your Committee received comments on this measure from the State Insurance Commissioner and the Tax Foundation of Hawaii.

     Your Committee finds that medical savings accounts may create incentives for personal responsibility and cost control on medical expenses.  Your Committee notes the concerns raised by certain testifiers and encourages further discussion on this measure as it proceeds to your Committee on Ways and Means.

     Your Committee has amended this measure by:

     (1)  Inserting an effective date of July 1, 2050, to allow for further discussion; and

     (2)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 857, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 857, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Health,

____________________________

JOSH GREEN, M.D., Chair