STAND. COM. REP. NO.1174

Honolulu, Hawaii

, 2003

RE: H.B. No. 391

H.D. 2

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Labor, to which was referred H.B. No. 391, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO COLLECTIVE BARGAINING,"

begs leave to report as follows:

The purpose of this measure is to require the employer's base monthly contribution for health benefits provided to retirees under the Employer-Union Health Benefits Trust Fund to take effect retroactive to July 1, 2001, and to be adjusted annually, beginning retroactively from July 1, 2002.

The measure also requires the percentage increase or decrease in Medicare Part B premium rate to be calculated by dividing the Medicare Part B premium in effect at the beginning of the new plan year by the rate in effect at the beginning of the previous plan year. This measure further postpones the sunset date of the Hawaii Public Employees Health Fund until July 1, 2004, and accordingly extends the authority of the Health Fund to contract for health and life insurance plans. Finally, this measure also delays the implementation date of the Hawaii Employer-Union Health Benefits Trust Fund (EUTF) until July 1, 2004.

The Hawaii State Teachers Association submitted testimony in support of this measure. The Department of Budget and Finance, the Department of Labor and Industrial Relations, the Department of Human Resources Development, and the Department of Human Resources for the City and County of Honolulu submitted testimony in opposition to this measure.

The EUTF administrator presented oral testimony indicating that the EUTF Board of Trustees has taken action towards the July 1, 2003, implementation of the EUTF.

Your Committee finds that although under existing law, the employer's monthly contribution for health benefits plans for retirees is scheduled to be adjusted annually, beginning July 1, 2004, the cost for health benefits has already increased, if not exceeded the amounts specified in section 87A-33(b), Hawaii Revised Statutes. Your Committee determines that in order to avoid the imposition of a financial burden upon the retirees and to fulfill an obligation to the retirees in recognition of their years of dedicated public service, timely action must be taken to ensure that retirees maintain similar health benefits, to that which were provided to them prior to the establishment of the Employer-Union Health Benefits Trust Fund.

Your Committee also finds that the ability of the Hawaii EUTF to be implemented on July 1, 2003, although optimistic, is still unclear. Your Committee determines that it is the intention and belief of the EUTF board that the EUTF will be operational as of that date. However, despite the concerted efforts and intentions of the EUTF board, this measure should continue, as a precautionary measure, should it become clear that the EUTF will not be operational on that date.

Your Committee has amended this measure as follows:

(1) By including an amendment to section 87A-24, Hawaii Revised Statutes, to exclude EUTF administrative costs from health plan and long-term care benefits plans rates, which shall be repealed on July 1, 2007; and

(2) By delaying the effective date of the measure to July 1, 2050, to permit further discussion as necessary.

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 391, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 391, H.D. 2, S.D. 1, and be referred to the Committee on Ways and Means.

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

____________________________

BRIAN KANNO, Chair