STAND. COM. REP. NO. 3135

 

Honolulu, Hawaii

                  

 

RE:    GOV. MSG. NOS. 618, 620, 621, 622, 623, 624, 625, 626, 628, 643

 

 

 

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2012

State of Hawaii

 

Sir:

 

     Your Committee on Commerce and Consumer Protection, to which was referred Governor's Message Nos. 618, 620, 621, 622, 623, 624, 625, 626, 628, and 643, submitting for study and consideration the nominations of: 

 

Board of Directors of the Hawai'i Health Connector

 

G.M. No. 618

SHERRY MENOR-MCNAMARA,

for a term to expire 6-30-2015 (Replaces GM607);

 

G.M. No. 620

ROBERT HIROKAWA,

for a term to expire 6-30-2014 (Replaces GM609);

 

G.M. No. 621

CLIFFORD ALAKAI,

for a term to expire 6-30-2016 (Replaces GM610);

 

G.M. No. 622

GWEN RULONA,

for a term to expire 6-30-2014 (Replaces GM611);

 

G.M. No. 623

CHRISTINE SAKUDA,

for a term to expire 6-30-2015 (Replaces GM612);

 


 

G.M. No. 624

JOAN DANIELEY,

for a term to expire 6-30-2015 (Replaces GM613);

 

G.M. No. 625

JENNIFER DIESMAN,

for a term to expire 6-30-2014 (Replaces GM614);

 

G.M. No. 626

MICHAEL GLEASON,

for a term to expire 6-30-2015 (Replaces GM615);

 

G.M. No. 628

FAYE KURREN,

for a term to expire 6-30-2014 (Replaces GM617); and

 

G.M. No. 643

CLEMENTINA CERIA-ULEP,

for a term to expire 6-30-2014,

 

begs leave to report as follows:

 

     Your Committee has reviewed the personal histories, resumes, and statements submitted by the nominees and finds Sherry Menor-McNamara, Robert Hirokawa, Clifford Alakai, Gwen Rulona, Christine Sakuda, Joan Danieley, Jennifer Diesman, Michael Gleason, Faye Kurren, and Clementina Ceria-Ulep to possess the requisite qualifications to be nominated to the Board of Directors of the Hawaii Health Connector.

 

     Your Committee finds that Act 205, Session Laws of Hawaii 2011, established the Hawaii Health Connector to create a health insurance exchange pursuant to the federal Patient Protection and Affordable Care Act of 2010.  Act 205, codified as chapter 435H, Hawaii Revised Statutes, established the Hawaii Health Connector as a nonprofit corporation to be governed by a board of directors.  Chapter 435H, Hawaii revised Statutes, requires the Hawaii Health Connector to be audited annually by the State Auditor, who must submit the results of each annual audit to the Insurance Commissioner.  Chapter 435H also dictates the composition of the Board of Directors, stating that the "membership of the board shall reflect geographic diversity and the diverse interests of stakeholders including consumers, employers, insurers, and dental benefit providers."

 

     Board members are also required by chapter 435H to "adopt policies prohibiting conflicts of interest and procedures for recusal of a member in the case of an actual or potential conflict of interest, including policies prohibiting a member from taking part in official action on any matter in which the member had any financial involvement or interest prior to the commencement of service on the board."

 

     Your Committee further finds that the purpose of the Board of Directors of the Hawaii Health Connector is to implement and execute the health insurance exchange in the State.  The Board has a unique opportunity that has been given to them by virtue of federal health care reform.  The Board has been tasked with starting up a new organization from the ground up, for which there is no successful, fully vetted template.  The Patient Protection and Affordable Care Act and its regulations allow health insurance exchanges to be developed according to each state's individual needs, thus recognizing that every state has different considerations that must be taken into account.  This flexibility is more appropriate than mandating a one-size-fits-all approach to health insurance exchanges, especially for Hawaii, which already implements the Hawaii Prepaid Health Care Act.

 

     Your Committee additionally finds that the Board and the State are operating under an extremely tight timeline to meet all federal deadlines for the health insurance exchange.  Hawaii's plan for the health insurance exchange must be accepted by federal regulators by January 1, 2013.  The Board must have the Hawaii Health Connector up and running by January 1, 2014, with additional benchmarks to be met along the way.  The nominees for the Board of Directors have the expertise, experience, and commitment to the mission of the Hawaii Health Connector that are necessary for its successful implementation, especially considering the amount of work that must be done in such a short timeframe.

 

     Your Committee also finds that the Board is not, and was not designed to be, a regulatory body.  According to chapter 435H, Hawaii Revised Statutes, the Insurance Commissioner determines eligibility for the inclusion of insurers and plans in the Hawaii Health Connector.  The Insurance Commissioner also retains full regulatory jurisdiction pursuant to the authority granted to the Insurance Commissioner under part II of article 2, chapter 431, Hawaii Revised Statutes.

 

     Your Committee has heard the concerns that the Hawaii Health Connector's status as a nonprofit organization will mean it is not subject to the State's sunshine laws.  However, your Committee believes that transparency of the Hawaii Health Connector exists and will continue once the permanent Board of Directors is in place.  The Board is required by statute to maintain transparency of Board actions, including public disclosure and posting of board minutes on the Connector's website.  Board meetings are open to the public and the Insurance Commissioner retains full regulatory jurisdiction over all insurers and qualified plans and qualified dental plans included in the connector.  Additionally, the Board of Directors must also abide by all federal laws and rules.

 

     Earlier this month, the United States Department of Health and Human Services released a final rule that sets forth requirements for a health insurance exchange governing board.  If the exchange is an independent state agency or a nonprofit entity established by the state, the state must ensure that the exchange governing board is clearly defined, is administered under a formal, publicly adopted operating charter or by-laws, holds regular public governing board meetings that are announced in advance, and ensures that a majority of the voting members have relevant experience.  The board must also represent consumer interests by ensuring that overall governing board membership includes at least one voting member who is a consumer representative and is not made up of a majority of voting representatives with a conflict of interest, including representatives of health insurance issuers or agents or brokers, or any other individual licensed to sell health insurance.  Under this arrangement, the exchange must have in place and make publicly available a set of guiding governance principles that include ethics, conflict of interest standards, accountability and transparency standards, and disclosure of financial interest.  The exchange must also implement procedures for disclosure of financial interests by members of the exchange board or governance structure.

 

     Your Committee notes that the interim Board of Directors adopted conflict of interest policies prohibiting members from voting on any matter which would "directly and substantially" affect a business or private undertaking in which the member has financial interest, or a competitor of that entity.  Your Committee also notes that membership on the Board of Directors is not currently weighted in favor of representatives of health insurers and is therefore compliant with the recently released federal rules.

 

     Your Committee has heard testimony from the nominees for the Board of Directors and is confident that, as members of the Board of Directors, they will remain committed to the Hawaii Health Connector and its mission of serving the consumer.  One of the goals of the board members will be to maintain transparency.  A website is in progress that will have a list of board meetings scheduled, a copy of board meeting minutes, and the conflict of interest policy. 

 

     Your Committee concludes that the nominees for the Board of Directors are a diverse, highly qualified group of individuals with integrity and a fiduciary duty to the Hawaii Health Connector.  Your Committee is confident that the members on the Board of Directors will bring up any perceptions of a conflict of interest with other board members, recuse themselves if necessary, and comply with all applicable federal and state laws, rules, and regulations.

 

SHERRY MENOR-MCNAMARA

 

     Your Committee received testimony in support of the nomination of Sherry Menor-McNamara from Wilson Homecare; The Chamber of Commerce of Hawaii; ProService Hawaii; Kona-Kohala Chamber of Commerce; Hawaii Crop Improvement Association; First Hawaiian Bank; Hawaii Alliance of Nonprofit Organizations; Hawaii Pacific Health; Hawaii Employers Council; Building Industry Association of Hawaii; Healthcare Association of Hawaii; Monsanto Hawaii; McCabe, Hamilton & Renny Co., Ltd.; The Hawaii Group, Inc.; Hawaii Pacific Health; LSZ Consulting; Community Media; Pacific Allied Products, Ltd.; Olsten Staffing and Executive Search Services; Hawaii Business Roundtable; and seven individuals.  Your Committee received testimony in opposition to the nomination of Sherry Menor-McNamara from Americans for Democratic Action Hawaii.

 

     Upon review of the testimony, your Committee finds that this nominee's professional background, dedication to the community, and proven leadership on the interim Board of Directors qualify her for appointment to the Board of Directors of the Hawaii Health Connector.  Your Committee notes that the nominee is currently the Senior Vice President of Government Affairs of The Chamber of Commerce of Hawaii, an experience that has enabled her to gain a broad understanding of issues and concerns facing business organizations, particularly with respect to health care insurance.  The nominee is also the Chair of the interim Board of the Hawaii Health Connector and has been able to facilitate the progress of the Hawaii Health Connector and manage constructive and in-depth dialogue among board members without losing sight of Hawaii Health Connector's mission.  Your Committee further finds that this nominee has a thorough understanding of the role and responsibilities of the Board of Directors.

 

ROBERT HIROKAWA

 

     Your Committee received testimony in support of the nomination of Robert Hirokawa from Hina Mauka, Healthcare Association of Hawaii, Hawaii Primary Care Association, and Hawaii Coalition for Health.

 

     Upon review of the testimony, your Committee finds that this nominee's background in the health care system, dedication to the community, and proven leadership on the interim Board of Directors qualify him for appointment to the Board of Directors of the Hawaii Health Connector.  Your Committee notes that the nominee has been involved in Hawaii's health care system for over twenty-five years, an experience that has enabled him to gain a broad understanding of the multitude of issues in the complex health care environment.  The nominee is the Chief Executive Officer of the Hawaii Primary Care Association, is on the Board of Directors of the Hawaii Public Health Association, and serves on the interim Board of Directors for the Hawaii Health Connector as a representative of Hawaii's federally qualified health centers.  Your Committee further finds that this nominee is dedicated to ensuring that the Hawaii Health Connector remains consumer-centered.

 

CLIFFORD ALAKAI

 

     Your Committee received testimony in support of the nomination of Clifford Alakai from Maui Economic Opportunity, Inc.; Tom Battisto & Associates, LLC; Maui Memorial Medical Center; American Medical Response Oahu; Accuity, LLP; and one individual.

 

     Upon review of the testimony, your Committee finds that this nominee's professional background, dedication to the community, and proven leadership on the interim Board of Directors qualify him for appointment to the Board of Directors of the Hawaii Health Connector.  Your Committee notes that the nominee has a good understanding of the health care delivery system, by virtue of his employment with Maui Medical Group, a physician-owned multispecialty medical group.  The nominee also has an accounting background, which helps him understand financial transactions, insurance risk pools, and cash flow.  The nominee serves as treasurer of the interim Board of Directors for the Hawaii Health Connector and understands the importance of having a diverse group of individuals on the Board capable of offering many different perspectives, including the unique insight available from neighbor island representatives.

 

GWEN RULONA

 

     Your Committee received testimony in support of the nomination of Gwen Rulona from International Longshore and Warehouse Union, Local 142.

 

     Upon review of the testimony, your Committee finds that this nominee's background, dedication to consumers, and proven leadership on the interim Board of Directors qualify her for appointment to the Board of Directors of the Hawaii Health Connector.  Your Committee notes that the nominee has served as Secretary-Treasurer and Director of Education and Legislation for the United Food and Commercial Workers Union, Local 480 for over two decades.  The nominee is well-versed in health care issues and serves on the interim Board of Directors for the Hawaii Health Connector, where she brings an important consumer perspective to matters before the interim Board.  Your Committee further finds that this nominee has a thorough understanding of the role and responsibilities of the Board of Directors.

 

CHRISTINE SAKUDA

 

     Your Committee received testimony in support of the nomination of Christine Sakuda from Healthcare Association of Hawaii.

 

     Upon review of the testimony, your Committee finds that this nominee's professional background, dedication to promoting access to quality health information, and proven leadership on the interim Board of Directors qualify her for appointment to the Board of Directors of the Hawaii Health Connector.  Your Committee notes that the nominee has spent her entire professional career in the field of health information technology.  The nominee is the Executive Director of the Hawaii Health Information Exchange, where she leads a skilled team from a diverse background toward the goal of implementing Hawaii's safe, effective, and high quality state health information exchange.  The nominee also serves on the interim Board of Directors and understands that the Hawaii Health Information Exchange and the Hawaii Health Connector are pioneering bodies committed to planning and furthering development of access to proper health care.

 

JOAN DANIELEY

 

     Your Committee received testimony in support of the nomination of Joan Danieley from Kaiser Permanente; Carlsmith Ball, LLP; and two individuals.  Your Committee received testimony in opposition to the nomination of Joan Danieley from Rights of Consumer Consortium, Kokua Council, AARP, Americans for Democratic Action Hawaii, Progressive Democrats of Hawaii, League of Women Voters of Hawaii, Hawaii Coalition for Health, and five individuals.

 

     Upon review of the testimony, your Committee finds that this nominee's diverse professional background, dedication to focusing on the needs of the consumer, and proven leadership on the interim Board of Directors qualify her for appointment to the Board of Directors of the Hawaii Health Connector.  Your Committee notes that the nominee has over fifteen years of health care experience, as an attorney, health plan executive, and clinical instructor.  The nominee is the Vice President of Health Plan Service and Administration at Kaiser Permanente Hawaii, where she is responsible for leading the strategy, development, and execution of health plan operational functions.  The nominee's prior success with business start ups, customer service, system implementation, and business operations will be of great benefit to the Hawaii Health Connector as it designs the new insurance exchange, meets the requirements of the Patient Protection and Affordable Care Act, conducts consumer outreach, and implements the systems required to run an efficient and effective exchange.  Your Committee further finds that this nominee is a member of the interim Board of Directors.

 

JENNIFER DIESMAN

 

     Your Committee received testimony in support of the nomination of Jennifer Diesman from Hawaiian Electric Company, Inc.; Hawaii Medical Service Association; Hina Mauka; Arcadia; Hawaii Business Roundtable; Healthcare Association of Hawaii; Helping Hands Hawaii; Outrigger Hotels Hawaii; and six individuals.  Your Committee received testimony in opposition to the nomination of Jennifer Diesman from Rights of Consumer Consortium, Kokua Council, AARP, Americans for Democratic Action Hawaii, Progressive Democrats of Hawaii, League of Women Voters of Hawaii, Hawaii Coalition for Health, and six individuals.

 

     Upon review of the testimony, your Committee finds that this nominee's professional experience, dedication to improving the health of the people of Hawaii, and proven leadership on the interim Board of Directors qualify her for appointment to the Board of Directors of the Hawaii Health Connector.  Your Committee notes that the nominee has been intimately involved with health care policy development in Hawaii for over thirteen years.  Her experience as an employee of the Hawaii Medical Service Association has enabled her to work closely with public and private entities across the State's health care spectrum, given her a wide perspective of the community, and given her an understanding of the importance of health care to the residents of Hawaii.  The nominee is active in many community organizations and boards, including Helping Hands Hawaii, Hawaii Health Information Exchange, Hawaii Association of Health Plans, and the interim Board of Directors of the Hawaii Health Connector.  Your Committee further finds that this nominee has a perspective that is critical to the effective functioning of the Board of Directors.

 

MICHAEL GLEASON

 

     Your Committee received testimony in support of the nomination of Michael Gleason from GBS/CIDP Foundation International; Goodwill Industries of Hawaii, Inc.; KTA Super Stores; Hawaii Alliance of Nonprofit Organizations; Faith Action for Community Equity; Hawaii Coalition for Health; and two individuals.

 

     Upon review of the testimony, your Committee finds that this nominee's background of service, dedication to underserved populations in the State, and proven leadership on the interim Board of Directors qualify him for appointment to the Board of Directors of the Hawaii Health Connector.  Your Committee notes that the nominee has over twenty years of service within the nonprofit sector in numerous key leadership roles and is the Chief Executive Officer of the Arc of Hilo, a nonprofit organization that provides services and advocacy to disadvantaged citizens in Hawaii.  The nominee has been the voice for the consumer on the interim Board of Directors of the Hawaii Health Connector, has actively worked toward outreach and collaboration with the stakeholder community, and as chair of the Consumer Outreach Committee, has focused on determining the best way to get vital Hawaii Insurance Exchange information to and from consumers.

 

FAYE KURREN

 

     Your Committee received testimony in support of the nomination of Faye Kurren from American Red Cross; Aloha Petroleum, Ltd.; First Insurance Company of Hawaii; Bank of Hawaii; American Savings Bank; Hawaii Pacific Health; Hawaiian Dredging Construction Company, Inc.; International Longshore and Warehouse Union, Local 142; and six individuals.  Your Committee received testimony in opposition to the nomination of Faye Kurren from Rights of Consumer Consortium; Kokua Council; American Association of Retired Persons; Americans for Democratic Actions; Progressive Democrats of Hawaii; League of Women Voters of Hawaii; Hawaii Coalition for Health; and five individuals.

 

     Upon review of the testimony, your Committee finds that this nominee's professional background, dedication to improving the oral health of the community, and commitment to public service qualify her for appointment to the Board of Directors of the Hawaii Health Connector.  Your Committee notes that the nominee is currently the President and Chief Executive Office of Hawaii Dental Service, and has proven experience and knowledge of the dental benefits industry and the delivery of affordable dental benefits to individuals and small businesses.  The nominee can bring considerable expertise to the Board of Directors of the Hawaii Health Connector regarding dental benefits, the oral health of Hawaii residents, and system design that would assist in implementing the dental benefit provisions of the health care reform law.

 

CLEMENTINA CERIA-ULEP

 

     Your Committee received testimony in support of the nomination of Clementina Ceria-Ulep from Faith Action for Community Equity, Wahiawa United Methodist Church, Hawaii Coalition for Health, and eight individuals.  Your Committee received testimony in opposition to the nomination of Clementina Ceria-Ulep from one individual.

 

     Upon review of the testimony, your Committee finds that this nominee's professional background, experience, and commitment to being a voice of the consumer qualify her for appointment to the Board of Directors of the Hawaii Health Connector.  Your Committee notes that the nominee has been a nurse educator for eighteen years, a registered nurse for over twenty-nine years, and a leader for over fifteen years of Faith Action for Community Equity, an interfaith grass roots organization.  The nominee has been the Chair of the health care committee of Faith Action for Community Equity, and understands the needs of consumers, in particular the needs of the medically underserved people of Hawaii.  The nominee is aware of the issues and struggles relating to health care that are faced by consumers and understands the role and responsibilities of the Board of Directors of the Hawaii Health Connector.

 

     As affirmed by the records of votes of the members of your Committee on Commerce and Consumer Protection that are attached to this report, your Committee, after full consideration of the background, experience, and qualifications of the nominees, has found the nominees to be qualified for the positions to which nominated and recommends that the Senate advise and consent to the nominations.

 

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

 

 

 

____________________________

ROSALYN H. BAKER, Chair