HOUSE OF REPRESENTATIVES

H.B. NO.

1806

TWENTY-SIXTH LEGISLATURE, 2012

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO THE HAWAII EMPLOYER-UNION HEALTH BENEFITS TRUST FUND.

 

 

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

 


     SECTION 1.  The purpose of this Act is to address the Hawaii employer-union health benefits trust fund.  Specifically, this Act amends the contribution provisions for an employee hired by the State or a county after June 30, 2013.

     More specifically, this Act:

     (1)  Sets, at a specified dollar amount, the state or county monthly contribution for the health benefits plan in which a new employee is enrolled;

     (2)  Provides for the automatic adjustment of the state or county monthly contribution for the health benefits plan on July 1 of each odd-numbered year;

     (3)  Requires the board of trustees of the trust fund to establish certain types of health benefits plans; and

     (4)  Makes the state or county monthly contribution for a new employee nonnegotiable under collective bargaining.

     This Act also makes an employee hired after June 30, 2013, ineligible for group life insurance benefits.

     SECTION 2.  Chapter 87A, Hawaii Revised Statutes, is amended by adding two new sections to part IV to be appropriately designated and to read as follows:

     "§87A-A  State and county contributions; employees first hired after June 30, 2013, during active service.  (a)  This section shall apply to an employee who is first hired after June 30, 2013, during the active service of the employee.

     (b)  Except as limited under subsection (d), the State, through the department of budget and finance, and the counties, through their respective departments of finance, shall pay to the fund for each employee subject to this section the following, as applicable:

     (1)  Medical benefits plan with prescription drug benefits:

         (A)  For an employee enrolled in a family medical benefits plan with prescription drug benefits, the lesser of $640 or the actual monthly cost of the family medical benefits plan;

         (B)  For an employee enrolled in a two-party medical benefits plan with prescription drug benefits, the lesser of $502 or the actual monthly cost of the two-party medical benefits plan; or

         (C)  For an employee enrolled in a self medical benefits plan with prescription drug benefits, the lesser of $207 or the actual monthly cost of the self medical benefits plan;

     (2)  Medical benefits plan without prescription drug benefits:

         (A)  For an employee enrolled in a family medical benefits plan without prescription drug benefits, the lesser of $519 or the actual monthly cost of the family medical benefits plan;

         (B)  For an employee enrolled in a two-party medical benefits plan without prescription drug benefits, the lesser of $407 or the actual monthly cost of the two-party medical benefits plan; or

         (C)  For an employee enrolled in a self medical benefits plan without prescription drug benefits, the lesser of $168 or the actual monthly cost of the self medical benefits plan;

     (3)  Prescription drug benefits:

         (A)  For an employee enrolled in a family prescription drug benefits plan, the lesser of $122 or the actual monthly cost of the family prescription drug benefits plan;

         (B)  For an employee enrolled in a two-party prescription drug benefits plan, the lesser of $95 or the actual monthly cost of the two-party prescription drug benefits plan; or

         (C)  For an employee enrolled in a self prescription drug benefits plan, the lesser of $40 or the actual monthly cost of the self prescription drug benefits plan;

     (4)  Dental benefits plan:

         (A)  For an employee enrolled in a family dental benefits plan, the lesser of $59 or the actual monthly cost of the family dental benefits plan;

         (B)  For an employee enrolled in a two-party dental benefits plan, the lesser of $36 or the actual monthly cost of the two-party dental benefits plan; or

         (C)  For an employee enrolled in a self dental benefits plan, the lesser of $18 or the actual monthly cost of the self dental benefits plan;

     (5)  Vision benefits plan:

         (A)  For an employee enrolled in a family vision benefits plan, the lesser of $9 or the actual monthly cost of the family vision benefits plan;

         (B)  For an employee enrolled in a two-party vision benefits plan, the lesser of $7 or the actual monthly cost of the two-party vision benefits plan; or

         (C)  For an employee enrolled in a self vision benefits plan, the lesser of $4 or the actual monthly cost of the self vision benefits plan.

     (c)  An employee subject to this section may enroll in a self, two-party, or family health benefits plan or two or more health benefits plans that do not provide duplicate benefits; provided that the state or county monthly contribution for the employee shall be calculated or limited in accordance with subsection (b) or subsection (d), no matter the type or number of health benefits plan or plans in which the employee is enrolled.

     (d)  The following shall apply to the state or county monthly contribution for an employee subject to this section:

     (1)  If employees subject to this section are married to each other or in a civil union or reciprocal beneficiary relationship with each other, then the state or monthly contribution for them shall not exceed the sum of the contributions to which each employee is entitled;

     (2)  If an employee subject to this section is married to or in a civil union or reciprocal beneficiary relationship with an employee subject to section 87A-32, section 87A-B shall apply to them;

     (3)  If the State or any of the counties establish cafeteria plans in accordance with Title 26, United States Code section 125, the Internal Revenue Code of 1986, as amended, and section 78-30, the state or county monthly contribution for employees who participate in a cafeteria plan shall be made through the cafeteria plan, and the payments made by the State or counties shall include their respective contributions to the fund and the employee's share of the cost of the employee's health benefits plan.

     (e)  The state or county monthly contribution for each health benefits plan under subsection (a) shall be adjusted on July 1 of each odd-numbered year, beginning July 1, 2017, in accordance with this section.

     The state or county monthly contribution for a health benefits plan to be effective on July 1 of an odd-numbered year shall be calculated by adjusting the state or county monthly contribution for the health benefits plan that was effective on July 1 of the previous odd-numbered year by the lesser of the following:

     (1)  The percentage change between:

          (A)  The aggregate general fund expenditure ceiling for the fiscal year commencing on July 1 of the odd-numbered year for which the base monthly contribution is to be adjusted; and

          (B)  The aggregate general fund expenditure ceiling for the fiscal year commencing on July 1 of the previous odd-numbered year; or

     (2)  The percentage increase or decrease between:

         (A)  The lowest medicare part B premium rate in effect on July 1 of the odd-numbered year for which the monthly contribution is to be adjusted; and

         (B)  The lowest medicare part B premium rate in effect on July 1 of the previous odd-numbered year.

          As used in this paragraph, "lowest medicare part B premium rate" means the rate of the lowest dollar amount published in the Federal Register each year on November 1 or on the business day closest to November 1 of each year after the medicare part B premium rate has been established by the Secretary of Health and Human Services and approved by the United States Congress.

     (f)  The State or county shall not make any monthly contribution for an employee who is not enrolled in a health benefits plan.

     (g)  Section 87A-40 shall apply to the contribution by an employee subject to this section for a health benefits plan in which the employee is enrolled.

     §87A-B  Treatment of employees subject to different state or county contributions during active service.  If a married couple, civil union partners, or reciprocal beneficiaries are comprised of an employee first hired before July 1, 2013, and an employee first hired after June 30, 2013, and neither is retired, the following shall apply:

     (1)  The employee first hired before July 1, 2013, may enroll in a self plan and be entitled to a state or county monthly contribution determined in accordance with section 87A-32.  The employee first hired after June 30, 2013, may enroll separately in a self plan and be entitled to a state or county monthly contribution determined in accordance with section 87A-A;

     (2)  One employee may enroll in a two-party plan under section 87A-32 or 87A-A that provides coverage for the spouse, civil union partner, or reciprocal beneficiary, and the employee enrolled shall be entitled to a state or county monthly contribution determined in accordance with the section 87A-32 or 87A-A, as applicable.  The spouse, civil union partner, or reciprocal beneficiary shall not be entitled to a separate state or county monthly contribution; or

     (3)  One employee may enroll in a family plan under section 87A-32 or 87A-A that provides coverage for the spouse, civil union partner, or reciprocal beneficiary, as well as other family members, and the employee enrolled shall be entitled to a state or county monthly contribution determined in accordance with section 87A-32 or 87A-A, as applicable.  The spouse, civil union partner, or reciprocal beneficiary shall not be entitled to a separate state or county monthly contribution."

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

     1.  By adding four new definitions to be appropriately inserted and to read:

     ""Dental benefits plan" means a group insurance contract or service agreement offered by a carrier providing dental benefits only or a similar schedule of benefits provided through the fund on a self-insured basis.

     "Medical benefits plan" means a group insurance contract or service agreement offered by a carrier providing medical, hospital, surgical, and other health care benefits or a similar schedule of benefits that are provided through the fund on a self-insured basis.  A "medical benefits plan" may include prescription drug benefits if the plan also provides hospital, surgical, and other health care benefits.  The term does not include a "long-term care benefits plan".

     "Prescription drug benefits plan" means a group insurance contract or service agreement offered by a carrier providing prescription drug benefits only or a similar schedule of benefits that are provided through the fund on a self-insured basis.

     "Vision benefits plan" means a group insurance contract or service agreement offered by a carrier providing vision benefits only or a similar schedule of benefits that are provided through the fund on a self-insured basis."

     2.  By amending the definition of "health benefits plan" to read:

     ""Health benefits plan" [means:

     (1)  A group insurance contract or service agreement that may include medical, hospital, surgical, prescribed drugs, vision, and dental services, in which a carrier agrees to provide, pay for, arrange for, or reimburse the cost of the services as determined by the board; or

     (2)  A similar schedule of benefits established by the board and provided through the fund on a self-insured basis.] is a general term inclusive of a dental benefits plan, medical benefits plan, prescription drug benefits plan, or vision benefits plan.  The term does not include a "long-term care benefits plan"."

     SECTION 4.  Section 87A-16, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§87A-16[]]  Health benefits plan; carriers.  (a)  The board shall establish [the] health benefits [plan or] plans, [which] that shall be exempt from the minimum group requirements of chapter 431[.] and fit into one of the plan types, a state or county monthly contribution for which is set under section 87A-A(b).  The health benefits plans shall include at least one of each of the following types:

     (1)  A medical benefits plan with prescription drug benefits;

     (2)  A medical benefits plan without prescription drug benefits;

     (3)  A dental benefits plan;

     (4)  A prescription drug benefits plan; and

     (5)  A vision benefits plan.

     (b)  The board may contract for the health benefits plans or provide health benefits through a noninsured schedule of benefits."

     SECTION 5.  Section 87A-17, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§87A-17[]]  Group life insurance benefits or group life insurance program.  The board may provide benefits under a group life insurance benefits program or group life insurance program to employees[.] hired before July 1, 2013.

     The board shall not provide a group life insurance benefits program or group life insurance program to an employee hired after June 30, 2013, during the employee's active service or after the employee's retirement."

     SECTION 6.  Section 87A-19, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§87A-19[]  Plans] Medical benefits plan or plans for part-time, temporary, and seasonal or casual employees.  (a)  The board may offer a medical[, hospital, or surgical] benefits plan or plans to part-time, temporary, and seasonal or casual employees at no cost to the employers.  The board may determine eligibility for part-time, temporary, and seasonal or casual employees by rules exempt from chapter 91 as provided in section 87A-26.

     (b)  The board shall establish the medical[, hospital, or surgical] benefits plan or plans, which shall be exempt from the minimum group requirements of article 10A of chapter 431.  [The medical, hospital, or surgical benefits plan or plans shall provide, pay for, arrange for, or reimburse the cost of medical, hospital, or surgical services, and may include prescribed hospital in-patient and out-patient service and medical benefits.]

     (c)  The board may contract for the medical[, hospital, or surgical] benefits plan or plans.  Each part-time, temporary, and seasonal or casual employee enrolled [for] in a medical[, hospital, or surgical] benefits plan shall pay monthly contributions directly to the board's designated carriers.  The monthly contributions may include the carrier's administrative costs."

     SECTION 7.  Section 87A-32, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§87A-32[]]  State and county contributions; [active] employees[.] first hired before July 1, 2013, during active service.  (a)  This section shall apply to an active employee first hired before July 1, 2013, during active service.

     (b)  The State, through the department of budget and finance, and the counties, through their respective departments of finance, shall pay to the fund a monthly contribution equal to the amount established under chapter 89C or specified in the applicable public sector collective bargaining agreements, whichever is appropriate, for each of their respective employee-beneficiaries and employee-beneficiaries with dependent-beneficiaries, which shall be used toward the payment of costs of a health benefits plan; provided that:

     (1)  The monthly contribution shall be a specified dollar amount;

     (2)  The monthly contribution shall not exceed the actual cost of a health benefits plan;

     (3)  If both husband and wife, civil union partners, or reciprocal beneficiaries are employee-beneficiaries[,] subject to this section, the total contribution by the State or the county shall not exceed the monthly contribution for a family plan; [and]

     (4)  If an employee subject to this section is married to or a civil union partner or reciprocal beneficiary of an employee subject to section 87A-A, section 87A-B shall apply to them; and

    [(4)] (5)  If the State or any of the counties establish cafeteria plans in accordance with Title 26, United States Code section 125, the Internal Revenue Code of 1986, as amended, and [part II of chapter 78,] section 78-30, the monthly contribution for those employee-beneficiaries who participate in a cafeteria plan shall be made through the cafeteria plan, and the payments made by the State or counties shall include their respective contributions to the fund and their employee-beneficiary's share of the cost of the employee-beneficiary's health benefits plan.

     [(b)] (c)  The State, through the department of budget and finance, and the counties, through their respective departments of finance, shall pay to the fund a monthly contribution equal to the amount established under chapter 89C or specified in the applicable public sector collective bargaining agreement, whichever is applicable, for each of their respective employees, to be used toward the payment of group life insurance benefits for each employee."

     SECTION 8.  Section 87A-39, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§87A-39[]]  Reimbursement for state contributions.  (a)  All state agencies having control of funds other than the general fund shall reimburse the State for contributions made by the State pursuant to [sections 87A-32, 87A-33, 87A-34, 87A-35, 87A-36, and 87A-37] this chapter on account of agency employees whose compensation is paid in whole or part from funds other than the general fund.

     (b)  All state and county agencies receiving federal funds, which may be expended for the purpose of replacing the contributions payable by the State to the fund, shall set aside a portion of the federal funds sufficient to reimburse the State for contributions made by the State pursuant to [sections 87A-32, 87A-33, 87A-34, 87A-35, 87A-36, and 87A-37,] this chapter on account of the employees in the agencies whose compensation is paid in whole or part from federal funds."

     SECTION 9.  Section 89-2, Hawaii Revised Statutes, is amended as follows:

     1.  By amending the definition of "collective bargaining" to read:

     ""Collective bargaining" means the performance of the mutual obligations of the public employer and an exclusive representative to meet at reasonable times, to confer and negotiate in good faith, and to execute a written agreement with respect to wages, hours, amounts of contributions by the State and counties to the Hawaii employer-union health benefits trust fund[,] for employees hired before July 1, 2013, and other terms and conditions of employment, except that by any such obligation neither party shall be compelled to agree to a proposal or be required to make a concession.  For the purposes of this definition, "wages" includes the number of incremental and longevity steps, the number of pay ranges, and the movement between steps within the pay range and between the pay ranges on a pay schedule under a collective bargaining agreement."

     2.  By amending the definition of "employee organization" to read:

     ""Employee organization" means any organization of any kind in which public employees participate and which exists for the primary purpose of dealing with public employers concerning grievances, labor disputes, wages, hours, amounts of contributions by the State and counties to the Hawaii employer-union health benefits trust fund[,] for employees hired before July 1, 2013, and other terms and conditions of employment of public employees."

     SECTION 10.  Section 89-9, Hawaii Revised Statutes, is amended as follows:

     1.  By amending subsection (a) to read:

     "(a)  The employer and the exclusive representative shall meet at reasonable times, including meetings sufficiently in advance of the February 1 impasse date under section 89-11, and shall negotiate in good faith with respect to wages, hours, the amounts of contributions by the State and respective counties to the Hawaii employer-union health benefits trust fund [to the extent allowed in subsection (e),] for employees hired before July 1, 2013, and other terms and conditions of employment [which] that are subject to collective bargaining and [which] that are to be embodied in a written agreement as specified in section 89-10, but [such] the obligation does not compel either party to agree to a proposal or make a concession[; provided that the parties may not negotiate with respect to cost items as defined by section 89-2 for the biennium 1999 to 2001, and the cost items of employees in bargaining units under section 89-6 in effect on June 30, 1999, shall remain in effect until July 1, 2001]."

     2.  By amending subsections (d) and (e) to read:

     "(d)  Excluded from the subjects of negotiations are matters of classification, reclassification, benefits of [but not] the Hawaii employer-union health benefits trust fund, contributions to the Hawaii employer-union health benefits trust fund[,] for employees hired after June 30, 2013, or retired employees, recruitment, examination, initial pricing, and retirement benefits except as provided in section 88-8(h).  The employer and the exclusive representative shall not agree to any proposal [which] that would be inconsistent with the merit principle or the principle of equal pay for equal work pursuant to section 76-1 or [which] that would interfere with the rights and obligations of a public employer to:

     (1)  Direct employees;

     (2)  Determine qualifications, standards for work, and the nature and contents of examinations;

     (3)  Hire, promote, transfer, assign, and retain employees in positions;

     (4)  Suspend, demote, discharge, or take other disciplinary action against employees for proper cause;

     (5)  Relieve an employee from duties because of lack of work or other legitimate reason;

     (6)  Maintain efficiency and productivity, including maximizing the use of advanced technology, in government operations;

     (7)  Determine methods, means, and personnel by which the employer's operations are to be conducted; and

     (8)  Take [such actions as] any action that may be necessary to carry out the missions of the employer in cases of emergencies.

     This subsection shall not be used to invalidate provisions of collective bargaining agreements in effect on and after June 30, 2007, and shall not preclude negotiations over the procedures and criteria on promotions, transfers, assignments, demotions, layoffs, suspensions, terminations, discharges, or other disciplinary actions as a permissive subject of bargaining during collective bargaining negotiations or negotiations over a memorandum of agreement, memorandum of understanding, or other supplemental agreement.

     Violations of the procedures and criteria so negotiated may be subject to the grievance procedure in the collective bargaining agreement.

     (e)  Negotiations relating to contributions to the Hawaii employer-union health benefits trust fund authorized under this chapter shall be for the purpose of agreeing upon the amounts which the State and counties shall contribute under section 87-4, toward the payment of the costs for a health benefits plan, as defined in section 87-1(8), and group life insurance benefits, and the parties shall not be bound by the amounts contributed under prior agreements; provided that section 89-11 for the resolution of disputes by way of arbitration shall not be available to resolve impasses or disputes relating to the amounts the State and counties shall contribute to the Hawaii employer-union health benefits trust fund."

     SECTION 11.  Section 89-11, Hawaii Revised Statutes, is amended by amending subsection (g) to read as follows:

     "(g)  The decision of the arbitration panel shall be final and binding upon the parties on all provisions submitted to the arbitration panel.  If the parties have reached agreement with respect to the amounts of contributions by the State and counties to the Hawaii employer-union health benefits trust fund for employees hired before July 1, 2013, by the tenth working day after the arbitration panel issues its decision, the final and binding agreement of the parties on all provisions shall consist of the panel's decision and the amounts of contributions agreed to by the parties.  If the parties have not reached agreement with respect to the amounts of contributions by the State and counties to the Hawaii employer-union health benefits trust fund by the close of business on the tenth working day after the arbitration panel issues its decision, the parties shall have five days to submit their respective recommendations for such contributions to the legislature, if it is in session, and if the legislature is not in session, the parties shall submit their respective recommendations for such contributions to the legislature during the next session of the legislature.  In such event, the final and binding agreement of the parties on all provisions shall consist of the panel's decision and the amounts of contributions established by the legislature by enactment, after the legislature has considered the recommendations for such contributions by the parties.  It is strictly understood that no member of a bargaining unit subject to this subsection shall be allowed to participate in a strike on the issue of the amounts of contributions by the State and counties to the Hawaii employer-union health benefits trust fund.  The parties shall take whatever action is necessary to carry out and effectuate the final and binding agreement.  The parties may, at any time and by mutual agreement, amend or modify the panel's decision.

     Agreements reached pursuant to the decision of an arbitration panel and the amounts of contributions by the State and counties to the Hawaii employer-union health benefits trust fund, as provided herein, shall not be subject to ratification by the employees concerned.  All items requiring any moneys for implementation shall be subject to appropriations by the appropriate legislative bodies and the employer shall submit all such items within ten days after the date on which the agreement is entered into as provided herein, to the appropriate legislative bodies."

     SECTION 12.  This Act does not affect health benefit plan contributions for a state or county employee first hired after June 30, 2013, that were established under a collective bargaining contract, the cost items of which were approved before the effective date of this Act.

     This Act shall not apply to such an employee until the initial expiration date of the collective bargaining contract, whether renewed or not.

     SECTION 13.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 14.  This Act shall take effect on July 1, 2013.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Hawaii Employer-Union Health Benefits Trust Fund; New State and County Employees

 

Description:

Sets statutorily the state or county monthly contributions for the health benefits plans of an employee who is first hired after 06/30/13 during the employee's active service.  Provides for biennial adjustment of the contributions.  Makes the state or county monthly contributions for the new employee nonnegotiable under collective bargaining.  Makes a new employee ineligible for group life insurance benefits.

 

 

 

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