Report Title:

Medical Savings Account

Description:

Establishes medical care savings accounts in the employer-union health benefits trust fund for health care needs for state and county employees.

HOUSE OF REPRESENTATIVES

H.B. NO.

1293

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO MEDICAL SAVINGS ACCOUNTS IN THE EMPLOYER-UNION HEALTH BENEFITS TRUST FUND.

 

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

SECTION 1. Chapter 87A, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART . MEDICAL SAVINGS ACCOUNTS

§87A-    Definitions. As used in this part:

"Account administrator" means a state or federally chartered bank, savings bank, savings and loan association, credit union, or trust company authorized to act as a fiduciary; or a third party administrator licensed by the commissioner of financial institutions.

"High-deductible health plan" means a health plan, that in the case of employee-only coverage, has an annual deductible of $1,500 and annual out-of-pocket expenses not in excess of $3,000; and in the case of employee and dependents coverage, has an annual deductible of $3,000 and annual out-of-pocket expenses not in excess of $5,500.

"Medical savings account" means a trust created or organized by the employer-union health benefits trust fund exclusively for the purpose of paying the qualified medical expenses of an employee and the employee's dependents.

"Medical savings account plan" means a plan that includes:

(1) The purchase by the employer-union health benefits trust fund of a high-deductible health plan for the benefit of an employee and the employee's dependents;

(2) The payment of moneys on behalf of an employee into a medical savings account by the employer of that employee; and

(3) An account administrator to administer the medical savings accounts and the reimbursement of qualified medical expenses therefrom.

"Qualified medical expenses" means amounts paid by or on behalf of an employee for medical care, defined as expenses covered under a high-deductible health plan, for the employee or the employee's dependents, but only to the extent the amounts are not compensated for by insurance or otherwise.

§87A-    Medical savings accounts; established. The employer-union health benefits trust fund shall establish a medical savings account plan option and shall establish rules that may be deemed reasonable and necessary for the administration of a medical savings plan.

§87A-    Medical savings accounts; purchase of high-deductible health plan required. In order to establish a medical savings account plan, the employer-union health benefits trust fund shall purchase a high-deductible health plan that provides basic benefits, extended basic benefits, and major medical expense benefits by indemnifying eligible employees for covered health care services and supplies through payments to providers or reimbursements to participants.

§87A-    Employer-union health benefits trust fund; duties with regard to medical savings accounts. For each employee who elects the medical savings account plan, the employer-union health benefits trust fund shall establish with an account administrator a medical savings account into which, on the first day of each calendar year, or on the date of enrollment in the program, as the case may be, the employer of the employee shall make a payment on behalf of the employee. At the end of each calendar year, the account administrator shall remit to each covered employee the balance remaining in the individual employee's medical savings account.

§87A-    Use of medical savings accounts. (a) An account administrator shall use the funds held in a medical savings account solely for the purpose of paying the qualified medical expenses of the employee or the employee's dependents.

(b) The employee may submit documentation for qualified medical expenses paid on behalf of the employee during a calendar year to the account administrator, and the account administrator shall reimburse the employees for the qualified medical expenses out of the medical savings account.

(c) Upon the death of the employee, the account administrator shall distribute the balance of the medical savings account to the estate of the employee, unless the employee has designated a beneficiary in writing to the account administrator, in which case the account administrator shall make the distribution to the designated beneficiary."

SECTION 2. This Act shall take effect upon its approval.

INTRODUCED BY:

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