Report Title:

Prepaid Health Care Advisory Council

Description:

Prohibits persons employed by a managed care plan, other than health care providers, from serving as a member on the Prepaid Health Care Advisory Council. (SB665 HD2)

THE SENATE

S.B. NO.

665

TWENTY-SECOND LEGISLATURE, 2003

S.D. 1

STATE OF HAWAII

H.D. 2


 

A BILL FOR AN ACT

 

RELATING TO prepaid health care PLAN.

 

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

SECTION 1. Existing law in section 393-7(a), Hawaii Revised Statutes (HRS), requires the director of labor and industrial relations, after consulting with the prepaid health care advisory council, to determine whether a prepaid health care plan is qualified under Hawaii law to offer benefits under chapter 393, HRS, relating to the Prepaid Health Care Act. The legislature finds that new health plans seeking entry into Hawaii, particularly employer-sponsored health plans, have had difficulty obtaining approval from the advisory council. This gatekeeper process, though well intended, has resulted in a lack of competition in the marketplace for prepaid health care plans, with a probable impact on health insurance rates.

The federal Employee Retirement Income Security Act (ERISA), title 29 United States Code section 1144, as amended, supersedes any amendment to the Prepaid Health Care Act enacted after September 2, 1974, that provides for "more than the effective administration of such Act...". This Act does not amend substantive provisions of the Prepaid Health Care Act or impose new obligations upon employers; therefore, it is not affected by the ERISA preemption.

The purpose of this Act is to provide for more effective administration of the Prepaid Health Care Act by mandating that the prepaid health care advisory council shall not include a member from the insurance industry.

SECTION 2. Section 393-7, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) The prepaid health care advisory council shall be appointed by the director and shall include representatives of [the] providers of medical and public health [professions,] care services, representatives of consumer interests, and persons experienced in prepaid health care protection[.]; provided that a person employed by a managed care plan, other than a health care services provider, shall not be appointed to the prepaid health care advisory council. The membership of the council shall not exceed seven individuals. For purposes of this subsection, "managed care plan" shall have the same meaning as in section 431:14F-102."

SECTION 3. If any portion of the amendment to section

393-7, Hawaii Revised Statutes (HRS), made by this Act, is held by a court of competent jurisdiction to be preempted by the Employee Retirement Income Security Act of 1974 (29 U.S.C. section 1001 et. seq.) as amended, then such amendment shall be deemed to be repealed in its entirety and section 393-7 shall be reenacted as it read on the day before the effective date of this Act. Neither any holding of preemption nor the repeal of the amendments made by this Act shall affect, impair, or invalidate any other portion of section 393-7, HRS, or the application of such section to any other person or circumstance, and such remaining portions of section 393-7, HRS, shall at all times continue in full force and effect.

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.