HOUSE OF REPRESENTATIVES
TWENTY-SEVENTH LEGISLATURE, 2013
STATE OF HAWAII
A BILL FOR AN ACT
relating to the hawaii employer-union health benefits trust fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the Hawaii employer-union health benefits trust fund, as well as public employees and taxpayers, face major financial problems. The unfunded actuarial accrued liability of the trust fund is considerable and requires drastic action for amortization within a thirty-year period. Health benefits plan premiums and costs are also rising, placing a greater burden on both public employees and employers.
The purpose of this Act is to assist the board of trustees of the Hawaii employer-union health benefits trust fund with resolving these problems by making the board more proactive. Specifically, this Act:
(1) Adds an eleventh board member to represent the general public;
(2) Changes board voting to one-vote per member from the current one-vote per block of employee- and employer-representatives;
(3) Changes the number of board members that constitutes a quorum to a simple majority of the board, without regard to the interests represented by the trustees; and
(4) Requires board decisions to be made by a vote of a majority of the trustees to which the board is entitled, unless a greater vote is required by law. Current law requires board decisions to be made by a concurrence of collective votes divided between employer and employee interests.
This Act also clarifies the fiduciary duties of the board.
SECTION 2. Section 87A-5, Hawaii Revised Statutes, is amended to read as follows:
"§87A-5 Composition of board. The
board of trustees of the employer-union health benefits trust fund shall
consist of [
ten] eleven trustees appointed by the governor in
accordance with the following procedure:
(1) Five trustees, one of whom shall represent retirees, to represent employee-beneficiaries and to be selected as follows:
(A) Three trustees shall be appointed from a list of two nominees per trustee selected by each of the three exclusive representative organizations that have the largest number of employee-beneficiaries;
(B) One trustee shall be appointed from a list of two nominees selected by mutual agreement of the remaining exclusive employee representative organizations; and
(C) One trustee representing retirees shall be appointed from a list of two nominees selected by mutual agreement of all eligible exclusive representatives; and
(2) Five trustees to represent public employers[
(3) One trustee to represent the general public; provided that:
(A) The trustee shall not be an employee, employee-beneficiary, dependent-beneficiary, or employee's spouse; and
(B) If, during the trustee's term of office, the trustee becomes an employee, employee-beneficiary, dependent-beneficiary, or employee's spouse, the trustee's term shall automatically terminate.
Section] Except for the trustee
representing the general public, section 26-34 shall not apply to board
member selection and terms.
Notwithstanding any other provision of this section, no exclusive representative of a bargaining unit that sponsors or participates in a voluntary employee beneficiary association shall be eligible to select nominees or to be represented by a trustee on the board.
As used in this section, the term "exclusive representative" shall have the same meaning as in section 89-2."
SECTION 3. Section 87A-11, Hawaii Revised Statutes, is amended to read as follows:
§87A-11[ ]] Quorum;
board actions; voting. (a) Six trustees[ , three of whom represent the
public employer and three of whom represent employee-beneficiaries,] shall
constitute a quorum for the transaction of business.
Trustees representing the public
employers shall collectively have one vote. Trustees representing the
employee-beneficiaries shall collectively] Each trustee shall have
For any vote of the trustees representing
the public employers to be valid, three of these trustees must concur to cast
such a vote. In the absence of such concurrence, the trustees representing the
public employers shall be deemed to have abstained from voting. For any vote of the trustees representing
the employee-beneficiaries to be valid, three of these trustees must concur to
cast such a vote. In the absence of such concurrence, the trustees
representing the employee-beneficiaries shall be deemed to have abstained from
An abstention shall not be counted as either a vote in favor or against a matter before the board.
(c) Any action taken by the board shall be by
the concurrence of [
at least two votes. In the event of a tie vote on any
motion, the motion shall fail. Upon the concurrence of six trustees, the board
shall participate in dispute resolution.] a majority of the trustees to
which the board is entitled, except when a greater vote is required by law."
SECTION 4. Section 87A-15, Hawaii Revised Statutes, is amended to read as follows:
§87A-15[ ] Administration]
Duties of the board; administration of the fund. (a) The
board shall have the fiduciary duty to administer and carry out the
purpose of the fund. [ Health and other benefit plans shall be provided at a
(b) The board shall provide health benefits plans to employee-beneficiaries and dependent-beneficiaries that are affordable to both the public employers and the public employees.
(c) The board shall implement and recommend policies, in accordance with law, to amortize the unfunded actuarial accrued liability within thirty years from January 1, 2014.
(d) The board shall expend the employers' and employees' contributions received for the costs of the health benefits plans in compliance with appropriations acts and other applicable law."
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect on July 1, 2013.
Hawaii Employer-Union Health Benefits Trust Fund; Board of Trustees
Adds an eleventh member to the EUTF board of trustees to represent the general public. Changes board voting to one-vote per member. Changes quorum to a simple majority of the board. Requires board action to be made by a majority of the board, except when a greater number is required by law. Imposes fiduciary duty on board members. Requires board to amortize unfunded liability of EUTF within 30 years from 1/1/14.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.