SENATE FLOOR AMENDMENT
FLOOR AMENDMENT NO. DATE:
TO: S.B. 2961
SECTION 1. Senate Bill No. 2961 is amended as follows:
1. By amending Section 1 of the bill to read as follows:
"SECTION 1. The purpose of this Act is to allow for the 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 and existing retirees, that 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 also provides for retiree coverage for any employee who retires from the State or its various counties on or after July 1, 2003, who is a member of the employee organization which has established a VEBA trust under section 2 of this Act pursuant to an applicable collective bargaining agreement effective on or after July 1, 2003. Existing retirees who are members of an employee organization, who were previously covered by a collective bargaining agreement, will be provided a one-time election to join the employee organization sponsored VEBA trust once such a trust is established if they wish to do so. Retiree coverage provided by an employee organization's VEBA trust would be funded by employer contributions made directly to the VEBA trust by the employer.
This requirement of establishing a VEBA trust in order to be exempt from participation in the Hawaii Employer Union Trust Fund is intended to be a cost-containment measure in response to the ever increasing costs of health care throughout the State. It is also the intent of this Act to impose upon the trustees of these types of trusts the fiduciary duties required by the Employee Retirement Income Security Act of 1974, as amended."
2. By amending § -1 of section 2 of the bill by adding a definition of "retiree" to read as follows:
""Retiree" means an individual who has retired or will retire from the State of Hawaii or its various counties."
3. By amending § -2 of section 2 of the bill to read as follows:
"§ -2 Establishment of the trust. An employee organization must meet the following requirements if it is to establish a voluntary employees' beneficiary association trust under this chapter and be exempt from chapter 87A:
(1) The employee organization shall establish a tax-exempt trust pursuant to section 501(c)(9) of the Internal Revenue Code of 1986, as amended, known as a Voluntary Employees' Beneficiary Association (VEBA) trust;
(2) The trust may offer health benefits in accordance with section 501(c)(9) of the Internal Revenue Code of 1986, as amended, and related regulations;
(3) The trust shall provide for a plan of benefits it intends to provide for its members, and a summary plan description of the benefits and rules of the plan, which will meet the standards and requirements of the Employees Retirement Income Security Act of 1974, as amended. The trust shall furnish a copy of the summary plan description and its amendments to each employee covered under the plan with a copy to the department of human resources and development for the State of Hawaii, and to the department of education, University of Hawaii and the respective human resource departments of each county as their interest may appear; and
(4) The employee organization has an applicable collective bargaining agreement with the employer."
4. By amending § -5 of section 2 of the bill to read as follows:
"§ -5 State and county contributions to trust; active employees. Upon the establishment of a trust satisfying the requirements of section -2 by an employee organization, the State through the department of budget and finance and the several counties through their respective departments of finance, or the University of Hawaii shall pay to the trust a monthly contribution equal to the amount specified in the applicable public sector collective bargaining agreement from July 1, 2003, and thereafter."
5. By amending § -6 of section 2 of the bill to read as follows:
"§ -6 State and county contributions to trust; retired employees. (a) Any individual who becomes a retiree on or after the establishment of an employee organization sponsored trust pursuant to section -2, and who is a member of that employee organization, shall be enrolled in that employee organization sponsored trust established pursuant to section -2 and the applicable collective bargaining agreement under which the retiree was covered at the date of retirement.
(b) Any retiree, prior to an employee organization sponsored trust being established pursuant to section -2, who is a member of that 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 benefit trust to the corresponding employee organization VEBA trust once established pursuant to section -2.
(c) Upon the establishment of a trust satisfying the requirements of section -2 by an employee organization, the State, through the department of budget and finance and the several counties through their respective departments of finance, or the University of Hawaii, shall pay to the trust for each retiree who participates, a monthly contribution pursuant to the applicable collective bargaining agreement which shall not exceed the base monthly contributions or the specific contribution limits set forth in chapter 87A."
6. By adding §§ –7 and –8 to section 2 of the bill to read as follows:
"§ -7 Termination of the trust. Should an employee organization or a collective bargaining agreement which establishes a trust under section -2 terminate or cease to provide health benefits, the participants in such trust shall be given the opportunity to return to the Hawaii employer union health benefits trust upon the date that health benefits cease to be provided. All participants electing to return to the Hawaii employer union health benefits trust shall be given the same rights and benefits as if the participant had first participated in the Hawaii employer union health benefits trust from the inception of that trust.
§ -8 Violation of the chapter; enforcement. The attorney general shall enforce any violation of this chapter in addition to any other U.S. federal agency or other state agency that has regulatory oversight over the trust established under this chapter.""
7. By amending section 3 of the bill to read as follows:
"SECTION 3. This Act shall take effect upon its approval."
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( ) Withdrawn |