STAND. COM. REP. NO.2318

Honolulu, Hawaii

, 2002

RE: S.B. No. 2871

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committees on Health and Human Services and Commerce, Consumer Protection and Housing, to which was referred S.B. No. 2871 entitled:

"A BILL FOR AN ACT RELATING TO HEALTH CARE INSURERS,"

beg leave to report as follows:

The purposes of this measure are to require a company providing health insurance coverage that claims a general excise tax (GET) exemption to submit a timely annual financial report to the Department of Taxation (DOTAX), and to require a mutual benefit society claiming a tax exemption to submit the same financial report.

Your Committees received testimony in opposition to this measure from DOTAX and the Hawaii Medical Service Association. The Tax Foundation of Hawaii and Kaiser Permanente submitted comments.

Your Committees find that health insurance companies provide a public service that is largely privately financed. Every person who can afford to do so obtains health insurance coverage, and in that sense, health insurance companies have a captive audience. In addition, medical care is one of the most basic human needs.

Your Committees believe that the State must carefully oversee the companies providing health care insurance in Hawaii. Therefore, your Committees believe that it is appropriate to require health care providers claiming tax exemptions to provide annual financial reports to DOTAX.

In addition, your Committees amended this measure to require the Auditor to conduct regular audits of all companies within the health care industry, for the same reasons stated above.

As affirmed by the records of votes of the members of your Committees on Health and Human Services and Commerce, Consumer Protection and Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2871, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2871, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Health and Human Services and Commerce, Consumer Protection and Housing,

____________________________

RON MENOR, Chair

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DAVID MATSUURA, Chair