CONFERENCE COMMITTEE REP. NO. 149

Honolulu, Hawaii

                 , 2013

RE:    S.B. No. 867

       S.D. 2

       H.D. 1

       C.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

Madam and Sir:

     Your Committee on Conference on the disagreeing vote of the Senate to the amendments proposed by the House of Representatives in S.B. No. 867, S.D. 2, H.D. 1, entitled:

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

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

     The purpose of this measure is to amend the law relating to state and county contributions to the Hawaii Employer-Union Health Benefits Trust Fund.  Specifically, this measure:

     (1)  Repeals provisions relating to the base monthly contributions for health benefit plans paid by the State and counties for retired public employees;

     (2)  Repeals the requirement that the base monthly composite monthly contributions be adjusted annually and the method for calculating the contributions; and

     (3)  Makes conforming amendments to applicable sections of the law relating to the Hawaii Employer-Union Health Benefits Trust Fund to reflect the amendments under this measure.

     Your Committee on Conference finds that under existing law, retired state and county employees receive a base monthly contribution health premium benefit, the amount of which depends on the date that the retired employee entered the public employment system.  The base monthly contribution formula provides an upper threshold parameter used by the Hawaii Employer-Union Health Benefits Trust Fund Board of Trustees to determine the health benefit plans for retired state and county employees.  This base monthly contribution serves as a cap on the amount that the public employers are required to pay for medical, prescription drug, dental, and vision premiums.  This cap could potentially become a problem if a carrier exceeds the base monthly contribution premium for non-Medicare retirees, which could cause the out-of-pocket costs to the non-Medicare retirees to increase thereby diminishing the accrued retirees' health benefits, which violates article XVI, section 2, of the Hawaii State Constitution.  This measure eliminates this cap to address the potential diminishment of accrued benefits of retired public employees.

     Your Committee on Conference has amended this measure by adopting the S.D. 2 version, which provides an unspecified base monthly contribution amount for supplemental Medicare and non-Medicare two-party plans and sets forth the required state and county base monthly contribution for other retiree health benefit plans as unspecified amounts beginning January 1, 2014, and amending it further by:

     (1)  Adding specified base monthly contribution amounts for each employee-beneficiary enrolled in supplemental Medicare self plans, supplemental Medicare two-party plans, supplemental Medicare family plans, non-Medicare self plans, non-Medicare two-party plans, and non-Medicare family plans based on one hundred percent of the employer contribution amounts for these plans as of January 1, 2013, plus five percent; and

     (2)  Changing the effective date to January 1, 2014.

     As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of S.B. No. 867, S.D. 2, H.D. 1, as amended herein, and recommends that it pass Final Reading in the form attached hereto as S.B. No. 867, S.D. 2, H.D. 1, C.D. 1.

Respectfully submitted on behalf of the managers:

ON THE PART OF THE HOUSE

ON THE PART OF THE SENATE

____________________________ MARK M. NAKASHIMA, Co-Chair	____________________________ CLAYTON HEE, Chair
____________________________ MARK J. HASHEM, Co-Chair	____________________________ DAVID Y. IGE, Co-Chair