Report Title:

Health Fund; Member Contribution

 

Description:

Specifies that the amount ported to the employee organizations for health benefit plans and group life insurance be based on a percentage of the most cost effective plan that provides the same level of benefits for participants in plans of the Public Employee Health Fund and employee organizations. Sets forth other administrative and operational changes. (SD1)

 

THE SENATE

S.B. NO.

1058

TWENTY-FIRST LEGISLATURE, 2001

S.D. 1

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:

SECTION 1. Section 87-3, Hawaii Revised Statutes, is amended to read as follows:

"87-3 Purpose of the fund. (a) The fund shall be used for the purpose of providing employee-beneficiaries and dependent-beneficiaries with a health benefits plan and a long-term care benefits plan; provided that the fund, including rate credits or reimbursements from any carrier or self-insured plan or any earning or interest derived therefrom, may be used to stabilize health benefits plan or long-term care benefits plan rates and with approval of the legislature through appropriation of funds for other expenses necessary to effectuate these purposes.

(b) Any amount financed by the fund for the purchase of any employee benefit plans described in this chapter for employees participating in a health benefits plan of an employee organization that is not actually used for the purchase of such benefits, including but not limited to employers' share of any rate credit or reimbursement from any carrier or self-insured plan received by an employee organization and any earnings and interests therefrom, shall be returned to the fund.

(1) Each participating employee organization shall submit a report by March 31 of each year to the board of trustees identifying the amount and source of any and all funds to be returned to the fund pursuant to this subsection.

(2) The funds identified in paragraph (1) received by the employee organization for each benefit plan year shall be returned to the fund by June 30 of the following year.

(3) The State and the several counties may examine and audit the enrollment and financial transactions of employee organization benefits plans to verify each participating employee organization's compliance with this chapter as determined necessary.

(c) Notwithstanding any law to the contrary, any rate credit or reimbursement from any carrier or self-insured plan, including any such rate credit or reimbursement returned by an employee organization to the fund pursuant to subsection (b), in excess of funds used to stabilize health benefits plan or long-term care benefits plan costs, and for other expenses authorized by the legislature or any earning or interest derived therefrom, shall be returned to the State or the county for deposit into the appropriate general fund if the moneys are returned from:

(1) A plan that provides health benefits to retirees or the surviving spouses of deceased retirees or employees killed in the performance of their duty whose coverage is financed in whole or in part by the State or by the county; or

(2) A plan that provides health benefits to employees; provided that the amount returned to the general fund shall be only that portion financed by the State or by the county on behalf of the employee.

[(b)] (d) To the extent that contributions are provided for group life insurance benefits in sections 87-4 and 87-4.5, the fund shall also be used for the purpose of providing group life insurance benefits to employees.

[(c)] (e) To the extent that contributions are received from employee-beneficiaries and qualified-beneficiaries for long-term care insurance benefits under section 87-23.6, the fund shall also be used for the purpose of providing long-term care insurance benefits to eligible participants.

[(d)] (f) The fund may assist the State and the counties to implement and administer cafeteria plans authorized under section 125 of the Internal Revenue Code of 1986, as amended, and under part II of chapter 78."

SECTION 2. Section 87-22.3, Hawaii Revised Statutes, is amended to read as follows:

"87-22.3 Determination of health benefits plans. Pursuant to section 87-4, the board of trustees shall provide health benefits to employee-beneficiaries in the following manner:

(1) For those employee-beneficiaries who are not participating in a health benefits plan of an employee organization (hereafter "nonparticipating employee-beneficiaries"), the board of trustees shall establish health benefits plans and the requirements for eligibility under the health benefits plans. Any rate credit or reimbursement from any carrier derived from employee-beneficiary rate contributions to health benefits plans of nonparticipating employee-beneficiaries or interest derived therefrom may be used to improve the respective health benefits plans of nonparticipating employee-beneficiaries or to reduce the employee-beneficiary's respective share of monthly contributions to a health plan; or

(2) For employee-beneficiaries who participate in the health benefits plan of an employee organization, the board of trustees shall pay to the employee organization a monthly contribution for the purchase of health benefits for each employee-beneficiary[, in the amount provided in section 87-4(a),] based on the most cost effective plan offered by the fund or the actual monthly cost of the coverage provided to employee-beneficiaries by the employee organization, whichever is less[, towards the purchase of health benefits under the health benefits plan of an employee organization]. The board of trustees shall determine which of the fund's plans is the most cost effective plan. The employer contribution shall provide for the same level of benefits, adjusted for demographics including but not limited to age and family size, between the employee-beneficiaries in the plans of the fund, excluding all retirees, and employee-beneficiaries enrolled in the plans of the employee organization. In no case shall the employer contribution exceed sixty per cent of the actual cost of the plan selected by the employee-beneficiary. Actual cost of the plan means premiums charged by the insurance carrier less any refunds or dividends paid to the employee organization or the actual claim cost plus administrative fees charged to the employee organization."

SECTION 3. Section 87-22.5, Hawaii Revised Statutes, is amended to read as follows:

"87-22.5 Determination of dental plan benefits. Pursuant to section 87-4, the board of trustees shall provide dental plan benefits to the children of employee-beneficiaries who have not attained the age of nineteen in the following manner:

(1) For those children of employee-beneficiaries who are not participating in a dental program of an employee organization (hereafter called "nonparticipating employee-beneficiaries"), the board shall determine a dental plan and eligibility requirements for such benefits based upon a [statutory] monthly contribution per enrolled child[;] as provided for in section 87-4 (b);

(2) For those children of employee-beneficiaries who participate in the dental program of an employee organization, the board shall [allot the statutory monthly contribution] pay to the employee organization a monthly contribution per enrolled child or the actual monthly cost of the child's coverage, whichever is less, towards the purchase of dental plan benefits under the dental program of an employee organization; provided that [no]:

(A) No enrolled child shall have more than one [allotment a] contribution from the board per month; and

(B) The employer contribution is based on the most cost effective dental plan offered by the fund or the actual monthly cost of the coverage provided to the enrolled child by the employee organization, whichever is less, and that the employer contribution shall provide the same level of benefits, adjusted for demographics including but not limited to age and family size, between participants in the dental plans of the fund, excluding all retirees, and participants enrolled in the dental plans of the employee organization. In no case shall the employer contribution exceed the actual cost of the dental plan selected by the employee-beneficiary. Actual cost is as defined in section 87-22.3 (2), and the board of trustees shall determine which of the fund's plans is the most cost effective plan; or

(3) Paragraphs (1) and (2) notwithstanding, an employee-beneficiary shall be required to enroll all of the employee-beneficiary's children who are under the age of nineteen in the children's dental plan for nonparticipating employee-beneficiaries or the dental program of an employee organization."

SECTION 4. Section 87-23, Hawaii Revised Statutes, is amended to read as follows:

"87-23 Determination of benefits under the group life benefit program or group life insurance program. Pursuant to section 87-4, the board of trustees shall provide benefits under a group life benefit program or group life insurance program to employees in the following manner:

(1) For those employees who are not participating in a group life benefit program or group life insurance program of an employee organization (hereafter "nonparticipating employees"), the board shall determine a group life insurance benefit plan and eligibility requirements for such benefits based upon the amount to be contributed per employee under section 87-4(c);

(2) For those employees who participate in a group life benefit program or group life insurance program of an employee organization, the board shall pay a monthly contribution for each employee, [in the amount determined under section 87-4(c),] based on the most cost effective plan offered by the fund or the actual monthly cost of the coverage, whichever is less, towards the purchase of benefits under the group life benefit program or group life insurance program of an employee organization; provided that the employer contributions shall provide the same level of benefits, adjusted for demographics, including but not limited to age, between the employee in the group life benefit program or group life insurance program of the fund, excluding all retirees, and employees in the group life benefit program or group life insurance plan of the employee organization and in no case shall the employer contribution exceed the actual cost of the group life benefit program or group life insurance program selected by the employee. Actual cost is as defined in section 87-22.3 (2), and the board of trustees shall determine which of the fund's plans is the most cost effective plan; or

(3) Paragraphs (1) and (2) notwithstanding, an employee who is participating in a group life benefit program or group life insurance program of an employee organization may continue such plan and pay all of the premiums required while enrolled under paragraph (1); provided that no employee shall have more than one contribution from the board per month."

SECTION 5. Employee organizations who participated in the fund's health and group life insurance programs and received contributions from the fund from July 1, 1984 to June 30, 2001 shall:

(1) Return employer's share of any rate credits or reimbursements from any carrier or self insurance plan for each applicable benefit plan year and any earning or interest derived therefrom to the fund by June 30, 2002; and

(2) Submit a report to the board of trustees by June 30, 2002, identifying the amount and source of funds to be returned to the fund for each benefit plan year, which shall include for each benefit plan year by benefit type the employer's contributions, annual carrier experience reports, the employee organization annual audit report and any annual reports filed with the U.S. Department of Labor, as applicable.

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2050.