REPORT TITLE:
Health Fund

DESCRIPTION:
Eliminate state and county employer contributions for health
benefits for dependents of employees hired after the effective
date of this Act and limit employer health fund benefit
contributions for their employees when they retire.  Takes effect
July 1, 2000. (HB1060 HD2)


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1060
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO THE PUBLIC EMPLOYEES HEALTH FUND.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 87, Hawaii Revised Statutes, is amended
 
 2 by adding two new sections to be appropriately designated and to
 
 3 read as follows:
 
 4      "87-      State and county contributions to the fund;
 
 5 employees hired after June 30, 2000.  (a)  This section shall
 
 6 apply to state and county contributions to the fund for employees
 
 7 who are hired after June 30, 2000; provided this section shall
 
 8 not apply if an employee is hired prior to July 1, 2000, and
 
 9 transfers employment after June 30, 2000, or has at least ten
 
10 years of credited service and has suffered a break in service.
 
11 For the purposes of this section "transfer" means to leave state
 
12 or county employment and return within ninety calendar days.
 
13      (b)  The State, through the department of budget and finance
 
14 and the several counties through their respective departments of
 
15 finance, shall pay to the fund a monthly contribution established
 
16 under chapter 89C or specified in the applicable public sector
 
17 collective bargaining agreement for each of their respective
 
18 employee-beneficiaries, which shall be used toward the payment of
 
19 the cost of health benefits plan; provided that payment shall be
 

 
Page 2                                                     1060
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 limited to the monthly contributions of a single plan only.  If
 
 2 both husband and wife are employee-beneficiaries, the total
 
 3 contribution by the State or the appropriate county shall not
 
 4 exceed the monthly contribution of two single plans.  If however,
 
 5 the State or any of the several counties establish cafeteria
 
 6 plans in accordance with section 125 of the Internal Revenue Code
 
 7 of 1986, as amended, and part II of chapter 78, the monthly
 
 8 contribution to the fund for those employees who participate in a
 
 9 cafeteria plan shall be made through the cafeteria plan.  In this
 
10 event, the payments made by the State or the counties shall
 
11 include the State's and the counties' respective contributions to
 
12 the fund and the employee-beneficiary's share of the cost of the
 
13 health benefits plan selected and authorized by the employee-
 
14 beneficiary through the cafeteria plan.
 
15      (c)  Any monthly contribution established under chapter 89C
 
16 or specified in the applicable public sector collective
 
17 bargaining agreement, whichever is appropriate, for each child
 
18 who has not attained the age of nineteen of all employee-
 
19 beneficiaries who are enrolled for dental benefits shall be borne
 
20 by the employee-beneficiary and shall not be an obligation of the
 
21 State or counties.
 
22      (d)  The State through the department of budget and finance
 
23 and the several counties through their respective departments of
 

 
Page 3                                                     1060
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 finance, shall pay to the fund a monthly contribution equal to
 
 2 the amount established under chapter 89C or specified in the
 
 3 applicable public sector collective bargaining agreement,
 
 4 whichever is applicable, for each of their respective employees,
 
 5 to be used towards the payment of group life insurance benefits
 
 6 for each employee.
 
 7      (e)  The several counties through their respective
 
 8 departments of finance shall annually reimburse the State no
 
 9 later than December 30 of each fiscal year for their respective
 
10 pro-rata share of the cost of administering the fund for the
 
11 fiscal year for the benefit of their employee-beneficiaries and
 
12 dependent beneficiaries.  Each county's pro-rata share shall be
 
13 determined by allocating the amount appropriated for
 
14 administering the fund for the fiscal year, after excluding
 
15 therefrom state and county contributions for health and group
 
16 life insurance benefits, and in the same proportion as the
 
17 aggregate annual amount of state and county contributions for
 
18 such benefits as of October 31 of the preceding fiscal year.  The
 
19 amount of any excess or deficiency required to administer the
 
20 fund shall be subtracted from or added to, as the case may be,
 
21 the amount due from each county for the succeeding fiscal year.
 
22      (f)  The State, through the department of budget and finance
 
23 and the several counties through their respective departments of
 

 
Page 4                                                     1060
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 finance, shall advance the amount of their respective employee-
 
 2 beneficiaries contributions to the fund on or before the first
 
 3 day of each month.
 
 4      (g)  Contributions made by the State or the several counties
 
 5 shall not be considered as wages or salary of an employee-
 
 6 beneficiary, and no employee-beneficiary shall have any vested
 
 7 right in or be entitled to receive any part of any contribution
 
 8 made to the fund.
 
 9      87-      State and County contributions to the fund;
 
10 employees hired after June 30, 2000, and retired.  (a)  This
 
11 section shall apply to state and county contributions to the fund
 
12 for employees who were hired after June 30, 2000, and who
 
13 retired; provided that this section shall not apply if an
 
14 employee is hired prior to July 1, 2000, and transfers employment
 
15 after June 30, 2000, nor to any employee who has at least ten
 
16 years of credited service and who has suffered a break in
 
17 service.  For the purposes of this section "transfer" means to
 
18 leave state or county employment and return to state or county
 
19 employment within ninety calendar days.
 
20      (b)  For purposes of this section, if an employee leaves
 
21 state or county employment and returns to state or county
 
22 employment after the effective date of this Act, when the
 
23 employee's years of service shall be computed in the same manner
 
24 as set forth in chapter 88.
 

 
Page 5                                                     1060
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (c)  The State, through the department of budget and finance
 
 2 and the several counties through their respective departments of
 
 3 finance, shall pay to the fund a monthly contribution equal to
 
 4 one-half of the retired employee's monthly medicare or
 
 5 nonmedicare premium based on a single plan for retired employees
 
 6 with ten or more years but fewer than fifteen years of service;
 
 7 seventy-five per cent of the retired employee's monthly medicare
 
 8 or nonmedicare premium based on a single plan for retired
 
 9 employees with at least fifteen but fewer than twenty-five years
 
10 of service; and one hundred per cent of the retired employee's
 
11 monthly medicare or nonmedicare premium based on a single plan
 
12 for retired employees with twenty-five or more years of service
 
13 for the following benefits:
 
14      (1)  For hospital, medical, and surgical benefits for a
 
15           health benefits plan for each of their respective
 
16           employee-beneficiaries or their respective employee-
 
17           beneficiaries and their dependent beneficiaries
 
18           enrolled under this section;
 
19      (2)  For prescription drug benefits of a health benefits
 
20           plan for each of their respective employee-
 
21           beneficiaries or their respective employee-
 
22           beneficiaries and their dependent enrolled under this
 
23           section;
 

 
Page 6                                                     1060
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (3)  For vision care benefits of a health benefits plan for
 
 2           each of their respective employee-beneficiaries or
 
 3           their respective employee-beneficiaries and their
 
 4           dependent beneficiaries enrolled under this section;
 
 5           and
 
 6      (4)  For adult dental benefits of a health benefits plan for
 
 7           each of their respective employee-beneficiaries or
 
 8           their respective employee-beneficiaries and their
 
 9           spouses enrolled under this section.
 
10      If both husband and wife are employee-beneficiaries, the
 
11 total contribution by the State or the appropriate county, after
 
12 an employee's retirement pursuant to this section, shall not
 
13 exceed the monthly contribution of two single plans.
 
14      (d)  After an employee's retirement pursuant to this
 
15 section, the total monthly premiums for each child who has not
 
16 attained the age of nineteen of all employee-beneficiaries who
 
17 are enrolled in the fund's dental plan for children under this
 
18 section shall be borne by the retiree.
 
19      (e)  The State, through the department of budget and finance
 
20 and the several counties through their respective departments of
 
21 finance, shall pay to the fund a monthly contribution equal to
 
22 the total monthly premium for each retired employee enrolled in
 
23 the fund's group life insurance benefits plan under this section.
 

 
Page 7                                                     1060
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (f)  For the purpose of this section, the retired employee's
 
 2 monthly medicare and nonmedicare premiums for the hospital,
 
 3 medical, and surgical plan, the prescription drug plan, the
 
 4 vision care plan, and the adult dental plan shall be established
 
 5 annually by the board and shall be equal to the retired
 
 6 employee's medicare and nonmedicare premiums for the hospital,
 
 7 medical, and surgical plan, the prescription drug plan, the
 
 8 vision care plan, and the adult dental plan contracted by the
 
 9 fund with the largest enrollment.
 
10      (g)  The State, through the department of budget and finance
 
11 and the several counties through their respective departments of
 
12 finance, shall advance the amount of their respective employee-
 
13 beneficiaries' contributions to the fund on or before the first
 
14 day of each month.
 
15      (h)  Contributions made by the State or the several counties
 
16 shall not be considered as wages or salary of an employee-
 
17 beneficiary, and no employee-beneficiary shall have any vested
 
18 right in or be entitled to receive any part of any contribution
 
19 made to the fund."
 
20      SECTION 2.  Section 87-22.3, Hawaii Revised Statutes, is
 
21 amended to read as follows:
 

 
 
 
 
 
Page 8                                                     1060
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      "87-22.3  Determination of health benefits plans.  Pursuant
 
 2 to [section] sections 87-4, 87-4.5, 87-4.6, 87-   (b), and 87-
 
 3    (c), the board of trustees shall provide health benefits to
 
 4 employee-beneficiaries in the following manner:
 
 5      (1)  For those employee-beneficiaries who are not
 
 6           participating in a health benefits plan of an employee
 
 7           organization (hereafter "nonparticipating employee-
 
 8           beneficiaries"), the board of trustees shall establish
 
 9           health benefits plans and the requirements for
 
10           eligibility under the health benefits plans.  Any rate
 
11           credit or reimbursement from any carrier derived from
 
12           employee-beneficiary rate contributions to health
 
13           benefits plans of nonparticipating employee-
 
14           beneficiaries or interest derived therefrom may be used
 
15           to improve the respective health benefits plans of
 
16           nonparticipating employee-beneficiaries or to reduce
 
17           the employee-beneficiary's respective share of monthly
 
18           contributions to a health plan; or
 
19      (2)  For employee-beneficiaries who participate in the
 
20           health benefits plan of an employee organization, the
 
21           board of trustees shall pay a monthly contribution for
 
22           each employee-beneficiary, in the amount provided in
 
23           [section] sections 87-4(a), 87-4.5(b), 87-4.6(c), 87-
 

 
Page 9                                                     1060
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1               (b), and 87-    (c), or the actual monthly cost of
 
 2           the coverage, whichever is less, towards the purchase
 
 3           of health benefits under the health benefits plan of an
 
 4           employee organization. 
 
 5      SECTION 3.  Section 87-22.5, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      "87-22.5  Determination of dental plan benefits.  (a)
 
 8 Pursuant to [section] sections 87-4, 87-4.5, and 87-4.6, the
 
 9 board of trustees shall provide dental plan benefits to the
 
10 children of employee-beneficiaries who have not attained the age
 
11 of nineteen in the following manner:
 
12      (1)  For those children of employee-beneficiaries who are
 
13           not participating in a dental program of an employee
 
14           organization (hereafter called "nonparticipating
 
15           employee-beneficiaries"), the board shall determine a
 
16           dental plan and eligibility requirements for such
 
17           benefits based upon a statutory monthly contribution
 
18           per enrolled child;
 
19      (2)  For those children of employee-beneficiaries who
 
20           participate in the dental program of an employee
 
21           organization, the board shall allot the statutory
 
22           monthly contribution per enrolled child or the actual
 
23           monthly cost of the child's coverage, whichever is
 

 
Page 10                                                    1060
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           less, towards the purchase of dental plan benefits
 
 2           under the dental program of an employee organization;
 
 3           provided that no enrolled child shall have more than
 
 4           one allotment a month; or
 
 5      (3)  Paragraphs (1) and (2) notwithstanding, an employee-
 
 6           beneficiary shall be required to enroll all of the
 
 7           employee-beneficiary's children who are under the age
 
 8           of nineteen in the children's dental plan for
 
 9           nonparticipating employee-beneficiaries  or the dental
 
10           program of an employee organization.
 
11      (b)  Pursuant to sections 87-    (c) and 87-    (d), the
 
12 board of trustees shall provide dental plan benefits to the
 
13 children of employee-beneficiaries who have not attained the age
 
14 of nineteen as follows:
 
15      (1)  For those children of employee-beneficiaries who are
 
16           not participating in a dental program of an employee
 
17           organization (hereinafter called "non-participating
 
18           employee-beneficiaries"), the board shall determine a
 
19           dental plan and eligibility requirements for such
 
20           benefits based upon a statutory monthly contribution
 
21           per enrolled child."
 
22      SECTION 4.  Section 87-23, Hawaii Revised Statutes, is
 
23 amended to read as follows:
 

 
Page 11                                                    1060
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      "87-23  Determination of benefits under the group life
 
 2 benefit program or group life insurance program.  Pursuant to
 
 3 [section] sections 87-4, 87-4.5, 87-4.6, 87-    (d), and 87-
 
 4     (e), the board of trustees shall provide benefits under a
 
 5 group life benefit program or group life insurance program to
 
 6 employees in the following manner:
 
 7      (1)  For those employees who are not participating in a
 
 8           group life benefit program or group life insurance
 
 9           program of an employee organization (hereafter
 
10           "nonparticipating employees"), the board shall
 
11           determine a group life insurance benefit plan and
 
12           eligibility requirements for such benefits based upon
 
13           the amount to be contributed per employee under
 
14           [section] sections 87-4(c)[;], 87-    (d), and 87-
 
15               (e);
 
16      (2)  For those employees who participate in a group life
 
17           benefit program or group life insurance program of an
 
18           employee organization, the board shall pay a monthly
 
19           contribution for each employee, in the amount
 
20           determined under [section] sections 87-4(c), 87-
 
21               (d), and 87-    (e), or the actual monthly cost of
 
22           the coverage, whichever is less, towards the purchase
 

 
 
 
Page 12                                                    1060
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           of benefits under the group life benefit program or
 
 2           group life insurance program of an employee
 
 3           organization; or
 
 4      (3)  Paragraphs (1) and (2) notwithstanding, an employee who
 
 5           is participating in a group life benefit program or
 
 6           group life insurance program of an employee
 
 7           organization may continue such plan and pay all of the
 
 8           premiums required while enrolled under paragraph (1);
 
 9           provided that no employee shall have more than one
 
10           contribution from the board per month.
 
11      SECTION 5.  Statutory material to be repealed is bracketed.
 
12 New statutory material is underscored.
 
13      SECTION 6.  This Act shall take effect on July 1, 2000.