SB1337 SD2.DOC

SECTION 1. The legislature finds that preventive health care is important, not only for each individual's wellbeing, but for the health care system as a whole. Taking the initiative of maintaining or improving one's health reduces a person's potential for adverse health conditions that tax pocketbooks and incur costs to society.

The federal Patient Protection and Affordable Care Act encourages employers to provide opportunities for employees to participate in wellness programs to support healthier workplaces. The Act does this in part by maximizing the permissible reward to participants of a wellness program from twenty per cent to thirty per cent of the cost of health coverage, and increasing the maximum reward to as much as fifty per cent for programs designed to prevent or reduce tobacco use.

The legislature further finds that while wellness programs are laudable and desirable, there have been concerns that such programs that provide rewards for participants may run afoul of Hawaii's gambling and lottery statutes.

"Gambling" is defined in section 712-1220(4), Hawaii Revised Statutes, as follows:

"(4) "Gambling". A person engages in gambling if he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he or someone else will receive something of value in the event of a certain outcome. Gambling does not include bona fide business transactions valid under the law of contracts, including but not limited to contracts for the purchase or sale at a future date of securities or commodities, and agreements to compensate for loss caused by the happening of chance, including but not limited to contracts of indemnity or guaranty and life, health, or accident insurance." [Emphasis added]

"Lottery" is defined in section 712-1220(6), Hawaii Revised Statutes, as:

"(6) "Lottery" means a gambling scheme in which:

(a) The players pay or agree to pay something of value for chances, represented and differentiated by numbers or by combinations of numbers or by some other medium, one or more of which chances are to be designated the winning ones; and

(b) The winning chances are to be determined by a drawing or by some other method based on an element of chance; and

There are concerns that an employee who pays a portion of health care premiums and is eligible for a chance to win a reward based on the person's participation in a wellness program might be considered to be engaged in an illegal gambling scheme or lottery. While this situation likely was not contemplated by the crafters of the gambling laws in the early 1970s, it raises concerns sufficient to warrant appropriate action. The legislature finds that ensuring the success of wellness programs is too important to be stymied by a potential technicality of law.

The purpose of this Act is to clarify that participation in a health wellness program does not constitute illegal gambling.

SECTION 2. Section 712-1220, Hawaii Revised Statutes, is amended as follows:

1. By amending the definition of "gambling" to read:

"(4) "Gambling". A person engages in gambling if [he] the person stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under [~~his~~] the person's control or influence, upon an agreement or understanding that [he] the person or someone else will receive something of value in the event of a certain outcome. Gambling does not include bona fide business transactions valid under the law of contracts, including but not limited to contracts for the purchase or sale at a future date of securities or commodities, [~~and~~] agreements to compensate for loss caused by the happening of chance, including but not limited to contracts of indemnity or guaranty and life, health, or accident insurance[.], or any payment for or participation in a wellness program, as defined in section 2705(j) of the Public Health Service Act, that is sponsored by:

(A) A group health plan, as defined in section 2791(a) of the Public Health Service Act;

(B) An insurer subject to article 10A of chapter 431;

(D) A health maintenance organization subject to chapter 432D."

2. By amending the definition of "something of value" to read:

"(11) "Something of value" means any money or property, any token, object, or article exchangeable for money or property, or any form of credit or promise directly or indirectly contemplating transfer of money or property or of any interest therein, or involving extension of a service or entertainment. "Something of value" does not include any payment for health insurance coverage or for participation in a wellness program, as defined in section 2705(j) of the Public Health Service Act, that is sponsored by:

(A) A group health plan, as defined in section 2791(a) of the Public Health Service Act;

(B) An insurer subject to article 10A of chapter 431;

(D) A health maintenance organization subject to chapter 432D;

provided that the wellness program does not constitute gambling, as defined in paragraph (4)."

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 4. Statutory material to be repealed is bracketed

and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

THE SENATE	S.B. NO.	1337
TWENTY-SEVENTH LEGISLATURE, 2013		S.D. 2
STATE OF HAWAII