STAND. COM. REP. NO. 372

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1137
                                        




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred S.B. No. 1137 entitled: 

     "A BILL FOR AN ACT RELATING TO THE PUBLIC EMPLOYEES HEALTH
     FUND,"

begs leave to report as follows:

     The purpose of this measure is to extend medical insurance
benefit coverage to unmarried children of employee-beneficiaries
of the Public Employees' Health Fund who are less than
twenty-four years of age and who are full-time students.

     Testimony in qualified support of the measure was received
from the Department of Budget and Finance.  The Public Employees'
Health Fund submitted comments on the measure.

     Your Committee finds that the medical insurance plan
currently offered by the Public Employees' Health Fund is not
competitive with similar plans offered by other employee
organizations.  Consequently, public employees who have the
opportunity to subscribe to better valued medical insurance plans
for themselves and their children often do so.  This exodus from
the Public Employees' Health Fund has left its demographic
membership with an inordinately high percentage of older
participants who, by nature, require more costly medical care.
This higher cost for medical care translates to higher costs for
the Health Fund and derivatively to participating members and
public employers.  Your Committee believes that by providing a
competitive medical insurance plan to members, the Health fund

 
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will be able to attract younger participants, thereby reducing
demographic inequity and lowering costs.

     Your Committee also finds that providing health insurance to
unmarried children of employee-beneficiaries of the Public
Employees' Health Fund who are less than twenty-four years of age
and who are full-time students will assist many families by
ensuring that reasonably priced medical insurance coverage is
available for their children who are attending college.

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 1137 and recommends that it pass Second
Reading and be referred to the Committee on Ways and Means.

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



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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