VEBA Trusts; Bargaining Unit 5; Repeal Sunset
Extends the sunset date to July 1, 2010 for voluntary employees' beneficiary association trusts pilot program established pursuant to Act 245, Session Laws of Hawaii 2005, as amended. Amends the voluntary employees' beneficiary association trust law to reflect permanent nature of the program. Effective July 1, 2059. (SB2262 HD2)
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO HEALTH.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Act 245, Session Laws of Hawaii 2005, as amended by Act 294, Session Laws of Hawaii 2007, is amended as follows:
1. By amending section 1 to read:
"SECTION 1. The purpose of this Act is to
allow for the [
temporary] establishment of an employee organization
sponsored trust that would provide health benefits for state and county
employees of a particular bargaining unit, as well as future retirees of that
bargaining unit and existing retirees who wish to participate in such a trust.
The trust would be established as a voluntary employees' beneficiary
association (VEBA) trust pursuant to [ section] Section 501(c)(9)
of the Internal Revenue Code of 1986, as amended. The trust would be funded by
employer contributions negotiated pursuant to a collective bargaining agreement
and employee contributions to be determined by the trust's board of trustees
for active employees. The Act imposes on the trust all of the standards and
requirements of the Employee Retirement Income Security Act of 1974, as amended
(ERISA). Even if the trust is deemed to be a governmental plan exempt from
ERISA, the legislative intent is that the trust [ must] shall
comply with the standards and requirements of ERISA as a matter of state law
and that such shall be enforced by the attorney general, as well as
participants, beneficiaries, and fiduciaries of the plan or plans established
by the trust.
This Act also provides for retiree coverage for
any employee who retires from the State or the counties who was a member of an
employee organization that establishes a VEBA trust pursuant to a collective
bargaining agreement effective on or after July 1, 2005. Existing retirees who
are members of an employee organization and who were previously covered by a
collective bargaining agreement will be provided [
a one-time] the
opportunity to join the VEBA trust once established. Retiree coverage for
existing retirees provided by an employee organization's VEBA trust would be
funded by employer contributions made directly to the VEBA trust by the
requirement of establishing] establishment
of a VEBA trust [ in order to be] exempt from participation in the
Hawaii employer-union health benefits trust fund is intended to be a cost
containment measure in response to the ever-increasing costs of health care
throughout the [ State. However, because of the lack of data available on
the impact of a VEBA trust on the Hawaii employer-union health benefits trust
fund, this] state. This Act [ would allow] authorizes
the establishment of [ a] VEBA [ trust pilot program for a period of
three years. During this period, a thorough analysis of the costs and benefits
of a VEBA trust can be evaluated against the Hawaii employer-union health
benefits trust fund to determine what actual savings could be realized by the
State through this mechanism.] trusts by public employee organizations."
2. By amending section -9(b) in the new chapter added by section 2 to read:
"(b) Any retiree who, immediately prior
to retirement, was a member of an employee organization prior to the
establishment of a voluntary employees' beneficiary association trust by the
employee organization, and who was previously covered by a collective
bargaining agreement, shall be given a one-time option to transfer
participation from the Hawaii employer-union health benefits trust fund
established under chapter 87A to the organization's voluntary employees'
beneficiary association trust once the latter is established[
provided that any retiree who, prior to July 1, 2008, declined the option to
transfer from participation in the Hawaii employer-union health benefits trust
fund to the organization's voluntary employees' beneficiary association trust
shall be given a final, one-time option to transfer participation. Upon
the establishment of the voluntary employees' beneficiary association trust,
the State, through the department of budget and finance and the counties,
through their respective departments of finance, shall pay to the trust for
each retiree who opts to transfer into a voluntary employees' beneficiary
association trust, a monthly contribution equal to the contribution paid on
behalf of a similarly situated retiree under the Hawaii employer-union health
benefits trust fund."
3. By amending section 8 to read:
"SECTION 8. This Act shall take effect
upon its approval, for the purpose of establishing a voluntary employees'
beneficiary association trust pilot program in March, 2006 and
2009;] 2010; provided that sections 89‑2,
89‑3, 89‑6, and 89‑9, Hawaii Revised Statutes, are reenacted
in the form in which they read on the day before the effective date of this Act."
SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 3. This Act shall take effect on July 1, 2059.