STAND. COM. REP. NO. 225________

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1679
                                     H.D. 1

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Human Services and Housing, to which was
referred H.B. No. 1679 entitled: 


begs leave to report as follows:

     The purpose of this bill is to make participation in long-
term care (LTC) benefit plans for public employees mandatory and
funded entirely by contributions by the Public Employees Health
Fund (Health Fund).

     The Department of Commerce and Consumer Affairs submitted
testimony in support of the intent of this measure.  The
Department of Budget and Finance submitted comments.

     Your Committee finds that the Hawaii Employers' Mutual
Insurance Company (HEMIC) has taken exploratory steps as to
whether it is statutorily possible and economically feasible for
HEMIC to establish LTC benefit plans.  Upon HEMIC's review of the
statutes, it was determined that HEMIC would qualify for forming
a subsidiary to offer such a plan.  However, an Attorney
General's interpretation is needed to qualify this determination.

     Your Committee is concerned about the requirement for the
Health Fund to pay the entire cost of LTC benefit plans because
of the unknown financial impact on the Health Fund.  It would
benefit your Committee to know what the Health Fund expenses
would be as well as the cost-share to employees.

                                 STAND. COM. REP. NO. 225________
                                 Page 2

     Your Committee has amended this measure by:

     (1)  Making LTC insurance benefit plans offered by the
          Health Fund:

          (A)  Mandatory for employee-beneficiaries with ten or
               more years of service; provided that the employee-
               beneficiary has the option to opt out;

          (B)  Voluntary for employee-beneficiaries with nine
               years of service or less; and

          (C)  Voluntary for any employee-beneficiary's spouse or
               reciprocal beneficiary, and qualified-

     (2)  Authorizing HEMIC to form a subsidiary insurance
          company to provide LTC benefit plans at actuarially
          sound rates; and

     (3)  Making technical, nonsubstantive amendments for
          purposes of clarity and style.

     As affirmed by the record of votes of the members of your
Committee on Human Services and Housing that is attached to this
report, your Committee is in accord with the intent and purpose
of H.B. No. 1679, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as H.B. No. 1679, H.D.
1, and be referred to the Committee on Labor and Public

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Human Services
                                   and Housing,

                                   DENNIS A. ARAKAKI, Chair