S.B. 946 Summary

• Establishes a task force within the Department of Budget and Finance to examine the unfunded liability of the Hawaii Employer-Union Health Benefits Trust Fund (EUTF), estimated between $15-17 billion, with a report due 20 days before the 2014 legislative session.

• Creates the Hawaii Employer-Union Health Benefits Trust Fund Captive Insurance Company as a licensed reciprocal insurer to manage state and county employee health benefits, aiming to reduce operating costs by eliminating commissions, profit margins, and retaining investment income.

• Establishes an 11-member board of trustees composed of 5 representatives of employee-beneficiaries (including 1 retiree), 5 public employer representatives, and 1 county representative, appointed by the governor based on union and employer nominations.

• Requires employers to contribute to a reserve account with an initial $1.5 billion target to be accumulated within five years to pre-fund unfunded health benefit liabilities for retirees and their beneficiaries.

• Transfers all rights, powers, and functions of the existing EUTF to the new captive insurance company and repeals Chapter 87A (Hawaii Revised Statutes); effective July 1, 2113.