STAND. COM. REP. NO.  332-12

Honolulu, Hawaii

                , 2012

RE:   H.B. No. 2492

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Sixth State Legislature

Regular Session of 2012

State of Hawaii

Sir:

     Your Committee on Labor & Public Employment, to which was referred H.B. No. 2492 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 improve the efficiency and cost effectiveness of the Hawaii Employer-Union Health Benefits Trust Fund and reduce confusion for retirees with regard to the annual adjustments of their base monthly contribution rates by changing the date that the base monthly contribution is annually adjusted from July 1 of each year to January 1 of each year.

The Department of Budget and Finance, Administrator of the Hawaii Employer-Union Health Benefits Trust Fund, and Hawaii State Teachers Association testified in support of this measure.

     Currently, a retiree's base monthly contribution is adjusted annually, every July 1, based on federal Medicare part B rate adjustments.  However, Medicare part B adjustments are determined annually and are effective every January 1.  Additionally, the Hawaii Employer-Union Health Benefits Trust Fund retiree plan year is January 1 to December 31.  Changing the adjustment of the base monthly contribution from July 1 of each year to January 1 of each year will align the Hawaii Employer-Union Health Benefits Trust Fund retiree plan year and base monthly contribution rate adjustment date with the federal Medicare part B adjustment date.  Your Committee finds that having only one rate change per year instead of two will be more administratively efficient for the Hawaii Employer-Union Health Benefits Trust Fund and will be less confusing for retirees.

     Your Committee has amended this measure by changing the date the annual adjustment of the base monthly contribution is to commence from January 1, 2012, to January 1, 2013.

     As affirmed by the record of votes of the members of your Committee on Labor & Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2492, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2492, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Labor & Public Employment,

____________________________

KARL RHOADS, Chair