HOUSE OF REPRESENTATIVES

H.C.R. NO.

29

TWENTY-FIRST LEGISLATURE, 2002

 

STATE OF HAWAII

 
   


HOUSE CONCURRENT

RESOLUTION

 

REQUESTING THE CONVENING OF A TASK FORCE TO EXAMINE THE HAWAII PREPAID HEALTH CARE ACT, CHAPTER 393, HAWAII REVISED STATUTES.

 

WHEREAS, in 1974, in an effort to ensure that the working people of Hawaii had access to adequate health care, the Legislature passed Act 210, Session Laws of Hawaii 1974, which has been codified as chapter 393, Hawaii Revised Statutes, and is known as the Hawaii Prepaid Health Care Act (PHCA); and

WHEREAS, the PHCA mandates employers to provide adequate prepaid health care coverage to employees working at least 20 hours per week; and

WHEREAS, since its enactment, the PHCA has accomplished a great deal in terms of providing adequate health care coverage for the working people of Hawaii, defining a basic health care coverage benefits package long before the idea became a standard, and enfranchising tens of thousands of people; and

WHEREAS, when the U.S. Congress enacted the Employee Retirement Income Security Act of 1974 (ERISA) three months after the enactment of the PHCA, the issue of whether federal law preempted the PHCA arose; and

WHEREAS, in 1977, Standard Oil Company of California, a self-insured employer with workers in Hawaii, filed suit in federal court, essentially questioning whether self-insured employers were subject to state regulation of employee benefits; and

WHEREAS, the court found in favor of Standard Oil and held that ERISA preempted the PHCA; and

WHEREAS, Hawaii sought and successfully obtained a waiver exempting the PHCA from ERISA preemption from the U.S. Congress in 1983; and

WHEREAS, although the waiver exempted the PHCA from ERISA, it also specifically prohibited the exemption of any changes to the Act after September 2, 1974, other than those that might improve "effective administration" of the Act; and

WHEREAS, this exemption essentially froze the PHCA in the form it was passed in 1974; and

WHEREAS, the frozen status of the PHCA has generated controversy to the extent that some argue that the waiver language does not allow the PHCA to evolve with the times; and

WHEREAS, during public hearings of the Mandated Benefits Advisory Task Force (Task Force), which was convened pursuant to H.C.R. No. 129 (2001), the Task Force was made aware of the problems associated with the PHCA; and

WHEREAS, the Task Force found that these issues merit an in-depth examination and review of the PHCA, and some of the specific issues raised in its deliberations include:

(1) The requirement that the employee's share for health care premiums is fixed at 1.5 percent of wages; provided that if the employee's contribution is less than one-half of the premium, the employer is liable for the remaining portion of the premium;

(2) The requirement that the employee not have to pay a premium higher than what is provided by the contractor providing the prevailing coverage of the type of health care plan; and

(3) The process by which the Prepaid Health Care Advisory Council recommends the approval of prepaid health care plans;

now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-first Legislature of the State of Hawaii, Regular Session of 2002, the Senate concurring, that the Insurance Commissioner is requested to convene a task force to review and examine the effectiveness of the PHCA (PHCA Task Force); and

BE IT FURTHER RESOLVED that the Insurance Commissioner be a member of the PHCA Task Force, serve as chair of the PHCA Task Force, and appoint no more than 12 PHCA Task Force members; and

BE IT FURTHER RESOLVED that at least one representative from each of the following interests be appointed as a member of the PHCA Task Force; provided that members of other groups may also be appointed:

(1) The Department of Labor and Industrial Relations;

(2) A mutual benefit society that provides health insurance under chapter 432, Hawaii Revised Statutes;

(3) A health maintenance organization that holds a certificate of authority under chapter 432D, Hawaii Revised Statutes;

(4) A business organization that represents small businesses with 20 or fewer employees;

(5) A business organization that represents larger businesses with more than 20 employees;

(6) A labor union that represents public sector employees;

(7) A labor union that represents private sector employees;

(8) A consumer health advocacy organization;

(9) An organization that represents licensed physicians; and

(10) An organization that represents alternate complementary care service providers;

and

BE IT FURTHER RESOLVED that the Task Force also examine the feasibility of:

(1) Amending the PHCA and the possible effects the amendments could have on Hawaii's ERISA exemption;

(2) Identifying or developing a process to ensure that any amendment to the PHCA does not jeopardize Hawaii's ERISA exemption (e.g., having a federal agency review any proposed amendment and certifying that it will not result in Hawaii losing its ERISA exemption); or

(3) Repealing the Act and recommending alternatives for its replacement;

and

BE IT FURTHER RESOLVED that the Task Force submit a report of its findings and recommendations to the Legislature no later than 20 days before the convening of the Regular Session of 2003; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Director of Labor and Industrial Relations and the Insurance Commissioner.

 

 

 

OFFERED BY:

_____________________________

Report Title:

Task force to examine the effectiveness of the PHCA.