Report Title:

EUTF; Retirement Prior to Medicare Age; Suspend Coverage

 

Description:

Suspends state and county contributions to the EUTF for all state and county employee-beneficiaries who retire after 7/1/09, regardless of date of hire and years of service, if the employee retires before the employee's medicare retirement age.  Resumes coverage after medicare retirement age.  Allows employee to retain health coverage through the EUTF by paying the respective state or county share of premiums until medicare retirement age.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

1719

TWENTY-FIFTH LEGISLATURE, 2009

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

relating to public employees.

 

 

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

 


     SECTION 1.  The legislature finds that the State is undergoing a significant and possibly protracted economic downturn in tandem with the national and global economic and financial crises.  Numerous jobs have been lost, a number of large and small companies have declared bankruptcy or left the State, and many families have suffered foreclosure on their over-mortgaged houses.  In the past year, the council on revenues has consistently reduced its forecasts of Hawaii's tax revenues.  Across-the-board spending restrictions have already been put in place in state government and a general hiring freeze has already been implemented except in areas that impact public health and safety.

     In the face of these extraordinary conditions, the State cannot proceed with business as usual.  All resources must be examined to address critical statewide health, safety, and educational needs.  Accordingly, the purpose of this Act is to generate additional general funds to ensure the delivery of critical services statewide by suspending the respective state and county contributions to the employer-union health benefits trust fund for premiums of all state and county public employees who elect to retire after July 1, 2009, regardless of date of hire or years of service, if the employee retires before reaching medicare retirement age; provided that:

     (1)  State and county monthly contributions shall resume upon the employee reaching medicare retirement age; and

     (2)  An employee who retires before reaching medicare retirement age may continue health care coverage by paying the monthly state or county contributions.

     SECTION 2.  Section 87A-33, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  Notwithstanding any law to the contrary, this section shall apply to state and county contributions to the fund for:

     (1)  The dependent-beneficiary of an employee who is killed in the performance of duty;

     (2)  A dependent-beneficiary, upon the death of the employee-beneficiary, except as provided in section 87A-36;

     (3)  An employee-beneficiary who retired after June 30, 1984, due to a disability falling within sections 88-79 and 88-285;

     (4)  An employee-beneficiary who retired before July 1, 1984;

     (5)  An employee-beneficiary who:

         (A)  Was hired before July 1, 1996;

         (B)  Retired after June 30, 1984; and

         (C)  Who has ten years or more of credited service, excluding sick leave;

     (6)  An employee-beneficiary who:

         (A)  Was hired after June 30, 1996; and

         (B)  Retired with twenty-five or more years of credited service, excluding sick leave, except as provided in section 87A-36; and

     (7)  Employees who retired prior to 1961 and their dependent-beneficiaries[.];

provided that if the employee-beneficiary elects to retire after July 1, 2009, and has not attained the medicare retirement age on the date of retirement, this section shall not apply to state and county contributions to the fund for any employee-beneficiary under paragraphs (5) and (6) for the period beginning on the date of retirement and ending on the date the employee-beneficiary reaches medicare retirement age; provided further that the employee-beneficiary may continue health coverage under this chapter if the employee-beneficiary elects to pay an amount equal to the respective state or county monthly contribution toward premiums."

     SECTION 3.  Section 87A-33.5, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§87A-33.5[]]  State and county contribution; reimbursement for retired employees.  (a)  Effective July 1, 2007, an employee-beneficiary who retires and relocates outside of the State shall be reimbursed for the premiums paid by the employee-beneficiary for a personal health insurance policy; provided that [the]:

     (1)  The board shall determine which employee-beneficiaries and what types of personal health insurance policies shall be eligible for reimbursement and may set other conditions that shall be met for the employee-beneficiary to receive the reimbursements provided under this section[.]; and

     (2)  If the employee-beneficiary elects to retire after July 1, 2009, and has not attained the medicare retirement age on the date of retirement, this section shall not apply to state and county contributions to the fund for any employee-beneficiary under section 87A‑33(a)(5) and (6) for the period beginning on the date of retirement and ending on the date the employee-beneficiary reaches medicare retirement age; provided that the employee-beneficiary may continue health coverage under this chapter if the employee-beneficiary elects to pay an amount equal to the respective state or county monthly contribution toward premiums.

     (b)  The reimbursement shall be the lesser of:

     (1)  The actual cost of the personal health insurance policy; or

     (2)  The amount of the state or county contribution for the most comparable health benefits plan.

     Reimbursements shall be paid by the fund on a quarterly basis upon the presentation of documentation that the premiums for the personal health insurance policy have been paid by the employee-beneficiary.  This section shall apply to all employee-beneficiaries who retire and relocate outside of the State, regardless of their date of retirement."

     SECTION 4.  Section 87A-34, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  This section shall apply to state and county contributions to the fund for employees specified in paragraph (1)(E) of the definition of "employee" in section 87A-1 who:

     (1)  Were hired on or before June 30, 1996; and

     (2)  Retired after June 30, 1984, with fewer than ten years of credited service, excluding sick leave[.];

but shall not apply to state and county contributions to the fund for any employee-beneficiary who elects to retire after July 1, 2009, and has not attained the medicare retirement age on the date of retirement for the period beginning on the date of retirement and ending on the date the employee-beneficiary reaches medicare retirement age; provided that the employee-beneficiary may continue health coverage under this chapter if the employee-beneficiary elects to pay an amount equal to the respective state or county monthly contribution toward premiums."

     SECTION 5.  Section 87A-35, Hawaii Revised Statutes, is amended to read as follows:

     "§87A‑35  State and county contributions; employees hired after June 30, 1996, but before July 1, 2001, and retired with fewer than twenty-five years of service.  (a)  This section shall apply to state and county contributions to the fund for employees who were hired after June 30, 1996, but before July 1, 2001, and who retire with fewer than twenty-five years of credited service, excluding sick leave; provided that this section shall not apply to the following employees, for whom state and county contributions shall be made as provided by section 87A-33:

     (1)  An employee hired prior to July 1, 1996, who transfers employment after June 30, 1996, and who cumulatively accrues at least ten years of credited service; and

     (2)  An employee hired prior to July 1, 1996, who has at least ten years of credited service prior to a break in service.

     For the purposes of this section:

     "Break in service" means to leave state or county employment for more than ninety calendar days before returning to state or county employment.

     "Transfer" means to leave state or county employment and return to state or county employment within ninety calendar days.

     (b)  For purposes of this section, if an employee leaves state or county employment and returns to state or county employment after June 30, 1996, upon retirement, the employee's years of service shall be computed in the same manner as set forth in chapter 88.

     (c)  The State, through the department of budget and finance, and the counties, through their respective departments of finance, shall pay to the fund:

     (1)  For retired employees enrolled in medicare or non-medicare health benefit plans with ten or more years but fewer than fifteen years of service, a monthly contribution equal to one-half of the base monthly contribution set forth under section 87A-33(b); and

     (2)  For retired employees enrolled in medicare or non-medicare health benefit plans with at least fifteen but fewer than twenty-five years of service, a monthly contribution of seventy-five per cent of the base monthly contribution set forth under section 87A-33(b).

If both husband and wife are employee-beneficiaries, the total contribution by the State or county shall not exceed the monthly contribution for a supplemental medicare family or non-medicare family plan, as appropriate.

     (d)  Subsection (c) shall not apply to any employee-beneficiary under this section who elects to retire after July 1, 2009, and has not attained the medicare retirement age on the date of retirement for the period beginning on the date of retirement and ending on the date the employee-beneficiary reaches medicare retirement age; provided that the employee-beneficiary may continue health coverage under this chapter if the employee-beneficiary elects to pay an amount equal to the respective state or county monthly contribution toward premiums."

     SECTION 6.  Section 87A-36, Hawaii Revised Statutes, is amended to read as follows:

     "§87A-36  State and county contributions; employees hired after June 30, 2001, and retired.  (a)  This section shall apply to state and county contributions to the fund for employees hired after June 30, 2001, and who retired, except that this section shall not apply to the following employees, for whom state and county contributions shall be made as provided by section 87A-35:

     (1)  An employee hired after June 30, 1996, and prior to July 1, 2001, who transfers employment after June 30, 2001, and who cumulatively accrues at least ten years of credited service; and

     (2)  An employee hired after June 30, 1996, and prior to July 1, 2001, who has at least ten years of credited service prior to a break in service.

     For purposes of this section:

     "Break in service" means to leave state or county employment for more than ninety calendar days before returning to state or county employment.

     "Transfer" means to leave state or county employment and return to state or county employment within ninety calendar days.

     (b)  For purposes of this section, if an employee leaves state or county employment and returns to state or county employment after July 1, 2001, upon retirement, the employee's years of service shall be computed in the same manner as set forth in chapter 88.

     (c)  The State, through the department of budget and finance, and the counties, through their respective departments of finance, shall pay to the fund:

     (1)  For retired employees based on the self plan with ten or more years but fewer than fifteen years of service, a monthly contribution equal to one-half of the base medicare or non-medicare monthly contribution set forth under section 87A-33(b);

     (2)  For retired employees based on the self plan with at least fifteen but fewer than twenty-five years of service, a monthly contribution equal to seventy-five per cent of the base medicare or non-medicare monthly contribution set forth under section 87A-33(b);

     (3)  For retired employees based on the self plan with twenty-five or more years of service, a monthly contribution equal to one-hundred per cent of the base medicare or non-medicare monthly contribution set forth under section 87A-33(b); and

     (4)  One-half of the monthly contributions for the employee-beneficiary or employee-beneficiary with dependent-beneficiaries upon the death of the employee, as defined in paragraph (1)(E) of the definition of "employee" in section 87A-1.

     If both husband and wife are employee-beneficiaries, the total contribution by the State or county shall not exceed the monthly contribution for two supplemental medicare self or non-medicare self plans, as appropriate.

     Subsection (c) shall not apply to any employee-beneficiary under this section who elects to retire after July 1, 2009, and has not attained the medicare retirement age on the date of retirement for the period beginning on the date of retirement and ending on the date the employee-beneficiary reaches medicare retirement age; provided that the employee-beneficiary may continue health coverage under this chapter if the employee-beneficiary elects to pay an amount equal to the respective state or county monthly contribution toward premiums."

     SECTION 7.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 8.  This Act shall take effect on July 1, 2009.

 

INTRODUCED BY:

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