Report Title:
VEBA Trusts; Bargaining Unit 5; Repeal Sunset
Description:
Repeals the sunset date for voluntary employees' beneficiary association trusts pilot program established pursuant to Act 245, Session Laws of Hawaii 2005, as amended. Amends the voluntary employees' beneficiary association trust law to reflect permanent nature of the program. Effective 07/01/2059. (HB2481 HD1)
HOUSE OF REPRESENTATIVES |
H.B. NO. |
2481 |
TWENTY-FOURTH LEGISLATURE, 2008 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO HEALTH.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Act 245, Session Laws of Hawaii 2005, as amended by Act 294, Session Laws of Hawaii 2007, is amended as follows:
1. By amending section 1 to read:
"SECTION 1. The purpose of this Act is to
allow for the [temporary] establishment of an employee organization
sponsored trust that would provide health benefits for state and county
employees of a particular bargaining unit, as well as future retirees of that
bargaining unit and existing retirees who wish to participate in such a trust.
The trust would be established as a voluntary employees' beneficiary
association (VEBA) trust pursuant to section 501(c)(9) of the Internal Revenue
Code of 1986, as amended. The trust would be funded by employer contributions
negotiated pursuant to a collective bargaining agreement and employee
contributions to be determined by the trust's board of trustees for active
employees. The Act imposes on the trust all of the standards and requirements
of the Employee Retirement Income Security Act of 1974, as amended (ERISA).
Even if the trust is deemed to be a governmental plan exempt from ERISA, the
legislative intent is that the trust must comply with the standards and
requirements of ERISA as a matter of state law and that such shall be enforced
by the attorney general, as well as participants, beneficiaries, and
fiduciaries of the plan or plans established by the trust.
This Act also provides for retiree coverage for
any employee who retires from the State or the counties who was a member of an
employee organization that establishes a VEBA trust pursuant to a collective
bargaining agreement effective on or after July 1, 2005. Existing retirees who
are members of an employee organization and who were previously covered by a
collective bargaining agreement will be provided [a one-time] the
opportunity to join the VEBA trust once established. Retiree coverage for
existing retirees provided by an employee organization's VEBA trust would be
funded by employer contributions made directly to the VEBA trust by the
employer.
The [requirement of establishing] establishment
of a VEBA trust [in order to be] that is exempt from
participation in the Hawaii employer-union health benefits trust fund is
intended to be a cost containment measure in response to the ever-increasing
costs of health care throughout the [State. However, because of the lack of
data available on the impact of a VEBA trust on the Hawaii employer-union
health benefits trust fund, this] state. This Act [would allow]
authorizes the establishment of [a] VEBA [trust pilot program
for a period of three years. During this period, a thorough analysis of the
costs and benefits of a VEBA trust can be evaluated against the Hawaii employer-union health benefits trust fund to determine what actual savings could be
realized by the State through this mechanism.] trusts by public employee
organizations."
2. By amending section -9(b) in the new chapter added by section 2 to read:
"(b) Any retiree who, immediately prior
to retirement, was a member of an employee organization prior to the
establishment of a voluntary employees' beneficiary association trust by the
employee organization, and who was previously covered by a collective bargaining
agreement, shall be given a one-time option to transfer participation from the
Hawaii employer-union health benefits trust fund established under chapter 87A
to the organization's voluntary employees' beneficiary association trust once
the latter is established[.]; provided that any retiree who, prior to
July 1, 2008, declined the option to transfer from participation in the Hawaii
employer-union health benefits trust fund to the organization's voluntary
employees' beneficiary association trust shall be given a final one-time option
to transfer participation. Upon the establishment of the voluntary
employees' beneficiary association trust, the State, through the department of
budget and finance and the counties, through their respective departments of
finance, shall pay to the trust for each retiree who opts to transfer into a
voluntary employees' beneficiary association trust, a monthly contribution
equal to the contribution paid on behalf of a similarly situated retiree under
the Hawaii employer-union health benefits trust fund."
3. By amending section 8 to read:
"SECTION 8. This Act shall take effect
upon its approval, for the purpose of establishing a voluntary employees'
beneficiary association trust [pilot] program in March, 2006 [and shall
be repealed on July 1, 2009; provided that sections 89‑2, 89‑3,
89‑6, and 89‑9, Hawaii Revised Statutes, are reenacted in the form
in which they read on the day before the effective date of this Act]."
SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 3. This Act shall take effect on July 1, 2059.