Report Title:

Medical Savings Account

Description:

Establishes medical care savings accounts for public employees.

HOUSE OF REPRESENTATIVES

H.B. NO.

1067

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to medical savings accounts.

 

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

SECTION 1. Chapter 87, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART . MEDICAL SAVINGS ACCOUNTS

§87-    Definitions. As used in this part unless the context otherwise requires:

"Account administrator" means a state or federally chartered bank, savings bank, savings and loan association, credit union, or trust company authorized to act as a fiduciary; or a third party administrator licensed by the commissioner of financial institutions.

"High-deductible health plan" means a health plan that in the case of individual coverage, has an annual deductible of $1,000 and annual out-of-pocket expenses not in excess of $2,000; and in the case of the individual's and dependent coverage, has an annual deductible of $3,000 and annual out-of-pocket expenses not in excess of $5,500.

"Medical savings account" means a trust created exclusively for the purpose of paying the qualified medical expenses of an individual or the individual's dependents.

"Medical savings account plan" means a plan that includes:

(1) The purchase by an individual of a high-deductible health plan for the benefit of the individual and the individual's dependents;

(2) The payment of moneys on behalf of an individual not otherwise covered by the Hawaii prepaid health care law, into a medical savings account; and

(3) An account administrator to administer the medical savings accounts and the reimbursement of qualified medical expenses therefrom.

"Qualified medical expenses" means amounts paid by or on behalf of an individual or the individual's dependents for medical care, defined as expenses covered under a high-deductible health plan, for the individual or the individual's dependents, but only to the extent the amounts are not compensated for by insurance or otherwise.

§87-    Medical savings accounts; purchase of high-deductible health plan required. To establish a medical savings account plan, the individual shall purchase a high-deductible health plan that provides basic benefits, extended basic benefits, and major medical expense benefits by indemnifying eligible participants for covered health care services and supplies through payments to providers or reimbursements to participants.

§87-    Use of medical savings accounts. (a) An account administrator shall use the funds held in a medical savings account solely for the purpose of paying the qualified medical expenses of the individual or the individual's dependents.

(b) The participants may submit documentation for qualified medical expenses paid by or on behalf of the participants during a calendar year to the account administrator, and the account administrator shall reimburse the participant for the qualified medical expenses out of the medical savings account.

(c) Upon the death of the participant, the account administrator shall distribute the balance of the medical savings account to the estate of the participant, unless the participant has designated a beneficiary in writing to the account administrator, in which case the account administrator shall make the distribution to the designated beneficiary."

SECTION 2. This Act shall take effect upon its approval.

INTRODUCED BY:

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