STAND. COM. REP. NO. 203

Honolulu, Hawaii

RE: S.B. No. 1359

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

Your Committee on Labor and Technology, to which was referred S.B. No. 1359 entitled:

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

begs leave to report as follows:

The purpose and intent of this measure is to establish a calculation for the Hawaii Employer-Union Health Benefits Trust Fund (Fund) employer base composite monthly contribution so that the contribution amount will be known to retirees during open enrollment.

Specifically, this measure:

(1) Effective January 1, 2026, establishes a 5.2 percent rate increase for the employer base composite monthly contribution; and

(2) Effective January 1, 2027, establishes that the employer base composite monthly contribution shall be based on the change in Medicare Part B premiums from 2025 to 2026 and at a two-year lag thereafter.

Your Committee received testimony in support of this measure from the Hawaii Employer-Union Health Benefits Trust Fund and an individual.

Your Committee finds that modifications in the Fund's contribution system are needed to maintain the financial health of the Fund and best serve participants. The current calculation of the employer base composite monthly contribution relies on Medicare Part B premium amounts that may not be published until after the retiree open enrollment period. Accordingly, in some years, retirees are uncertain of their employer's contribution amounts when deciding to enroll in the program. Your Committee further finds that this measure addresses this issue by requiring the employer contribution amounts to be calculated based on Medicare Part B premium amounts published before open enrollment, thereby providing more certainty to retirees during open enrollment.

As affirmed by the record of votes of the members of your Committee on Labor and Technology that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1359 and recommends that it pass Second Reading and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Labor and Technology,

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HENRY J.C. AQUINO, Chair