STAND. COM. REP. NO.622

Honolulu, Hawaii

, 2003

RE: S.B. No. 1320

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 1320 entitled:

"A BILL FOR AN ACT RELATING TO MEDICAL SAVINGS ACCOUNTS,"

begs leave to report as follows:

The purpose of this measure is to enable private insurers, mutual benefit societies, and health maintenance organizations to offer high-deductible health insurance policies in conjunction with medical savings accounts in Hawaii.

The Governor, the Department of Commerce and Consumer Affairs, the Department of Labor and Industrial Relations, the Legislative Information Services of Hawaii, the Hawaii Medical Service Association, and the Hawaii Medical Association submitted testimony in support of this measure.

Your Committee finds that Congress passed the Health Insurance Portability and Accountability Act of 1996 that created a pilot program for federal tax-free medical savings accounts (MSA). MSAs are tax-deferred savings accounts designed for health care. MSAs operate in conjunction with a high-deductible insurance policy in that money in the MSA may be used to pay for health-related costs not covered under the insurance policy.

Your Committee further finds that although MSAs are recognized under existing law, no references to MSAs exist outside of the tax code, thus, creating confusion as to whether insurers are permitted to offer high-deductible health insurance policies in conjunction with MSAs in Hawaii. The ability of insurers to provide high-deductible health insurance policies in conjunction with MSAs will offer employers and employees less expensive health coverage, the ability to utilize money in the MSA for health-related costs not covered under such policies, and the ability to save unused money in the MSA for future usage.

Your Committee has amended the measure by making numerous technical, nonsubstantive amendments to conform the measure to recommended drafting style and for clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1320, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1320, S.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection and Housing,

____________________________

RON MENOR, Chair