Tag Archives: EUTF

Hawaii Supreme Court hears case challenging EUTF health plan costs and coverage for retired public employees

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Attorney General Mark Bennett told the Hawaii Supreme Court last month that health benefits provided retired state and county workers are not among the retirement benefits the State Constitution protects from being “diminished or impaired”.

Bennett said health benefits are not administered by the Employee Retirement System and therefore fall outside of the benefits provided constitutional protection.

The health benefit plan when it came into existence…was not administered by the Employee Retirement System, was never part of the Employee Retirement System, and is not so now.”

But attorney Paul Alston, representing a group of retirees, said health benefits are constitutionally protected because they are part of a bargain struck between public employees and the state that provided a system of benefits, both cash pensions and health benefits, “both of which are conditioned on membership (in the ERS).”

Public employees took less in salary in exchange for the promise of long-term financial security, including health benefits, Alston argued.

Bennett and Alston appeared before the Supreme Court in a case brought by a group of retirees who say the Hawaii Employer-Union Health Benefits Trust Fund broke the law by failing to provide retirees with health benefits substantially equal to those of active workers.

The case takes on more immediate relevance in light of Governor Lingle’s proposal to cut Medicare reimbursements for spouses of state retirees as part of her plan to balance the state budget.

The lawsuit was filed in 2007 after the EUTF board rejected their claim. Last year, a ruling by Circuit Court Judge Eden Hifo sided with the retirees and overturned the EUTF decision.

In her ruling, Hifo determined that retiree health benefits are constitutionally protected, and must be similar to benefit plans for active employees. The state then appealed to the Supreme Court. Oral arguments were held on November 19.

Much of the argument by both sides focused on the Article 16 Section 2 of the State Constitution.

Section 2. Membership in any employees’ retirement system of the State or any political subdivision thereof shall be a contractual relationship, the accrued benefits of which shall not be diminished or impaired.

Bennett argued the provision doesn’t apply because health benefits should not be considered “accrued benefits” and are not administered directly by the ERS.

Bennett also argued EUTF could not supplement the retirees’ benefits without passing the costs on to retirees.

We wanted to be able to continue past practice of providing coverage to retirees…at no cost.

It was this concern to avoid out-of-pocket costs that drove the EUTF decision, Bennett argued.

But Alston dismissed these concerns about higher retiree premium payments as “fear mongering”, and said the differences between the health plans for active members and retirees was the result EUTF action to separate the two groups.

EUTF contract with Kaiser includes a package of benefits that treats retirees and actives the same, Alston said.

Only for people covered by HMSA is there a difference.

And this only because EUTF decided it would negotiate different rates for active members and retirees, unlike what it did with Kaiser.

Alston argued that providing fewer health benefits or requiring higher fees for retirees is a form of discrimination and should not be allowed.

Alston told the Supreme Court that retirees have have a higher co-payment, higher deductables, and their plans differ in “the quality and breadth of coverage.”

“What the EUTF is arguing is that it can discriminate against retirees as long as all retirees get the same,” Alston told the court.

A second lawsuit seeking damages, including reimbursement for amounts that retirees would not have had to pay if their plans had been the same as active member plans, is on hold pending the outcome of this appeal.

Unions lobbying for EUTF changes

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The major public worker unions are are placing a special emphasis on bills to be introduced in the 2010 legislative session aimed at “reforming or changing” the Employer-Union Health Benefits Trust Fund, according to a UH Professional Assembly newsletter.

UHPA reports:

The language will allow for new structures for providing benefit packages and improve the organization of the EUTF.

A benefits consultant is assisting in the process, with UHPA, HGEA, and UPW splitting the cost.

UHPA directors also passed a motion “to accept language enabling health insurance to be negotiated by the bargaining unit and the employer as part of the legislative proposal.”

The newsletter also described an earlier joint request to the EUTF board to cancel the recent open enrollment period and extend current health plans until the usual April-May open enrollment.

The unions also requested that in 2010 active public union members be given the option to choose a Kaiser plan, an HMA 90/10 plan, an HMA 80/20 plan, an HMSA 90/10 plan, an HMSA 80/20 plan and an HMSA HMO plan. There would be no change to the retirement benefits plan. [Note: The EUTF Trustees rejected the recommendations of the unions and only extended the open enrollment into December. Employee initiated changes in EUTF coverage will be effective February 1, 2010.]

While pushing its proposals in advance of EUTF’s November meeting, union representatives met on November 18 with benefits consultant Paul Tom and EUTF trustees.

It isn’t clear how many trustees were present at the meeting. However, the sunshine law may have been violated if more than two trustees took part. More than two members are only allowed to discuss board business at a regular public meeting, or as part of a committee assigned to investigate a specific matter. (See Section 92-2.5 HRS).

UHPA also reports that while EUTF has hired temporary workers and accepted additional staff from health plan administrators to get through the large volume of paperwork generated by the open enrollment, it’s regular staff are being forced to take furlough Fridays.

The most recent minutes posted on the EUTF web site are for its September 30 meeting. October board minutes are not yet available, despite the requirement spelled out in the Sunshine Law that minutes be available within 30 days of the meeting.

§92-9 Minutes. (a) The board shall keep written minutes of all meetings. Unless otherwise required by law, neither a full transcript nor a recording of the meeting is required, but the written minutes shall give a true reflection of the matters discussed at the meeting and the views of the participants. The minutes shall include, but need not be limited to:

(1) The date, time and place of the meeting;

(2) The members of the board recorded as either present or absent;

(3) The substance of all matters proposed, discussed, or decided; and a record, by individual member, of any votes taken; and

(4) Any other information that any member of the board requests be included or reflected in the minutes.

(b) The minutes shall be public records and shall be available within thirty days after the meeting, except where such disclosure would be inconsistent with section 92-5; provided that minutes of executive meetings may be withheld so long as their publication would defeat the lawful purpose of the executive meeting, but no longer.

It’s possible that the October minutes have been approved but are late in being posted to the EUTF web site.

And should I mention that the EUTF dependent verification instructions mailed to all public employees and retirees contained the wrong fax number, so that attempts to fax supporting documents failed?

Majority of EUTF’s preferred provider plan participants opt to shift back to HMSA

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At last week’s meeting of the Hawaii Employer-Union Health Benefits Trust Fund, it was publicly announced that approximately 21,000 members submitted forms to move to the PPO health plan administered by HMSA instead of staying with the “default” HMA plan.

If that’s still true when all the smoke clears, it will mean HMSA held on to nearly 2/3 of its plan participants despite the EUTF decision that initially “defaulted” all HMSA members over to HMA.

It’s a better outcome for HMSA than the earlier shakeout at the Hawaii State Teachers Association, where at least 2/3 of teachers remained in a new HMA-administered plan.

But it’s an even bigger boost for HMA, which went from about 700 EUTF members to something around 12,000.

Both companies say they are looking forward to the competition.

When I was at the State Capitol yesterday to pick up paperwork to be filed in order to work as a session staffer during the upcoming session, the House Accounting Office was fielding questions about the EUTF health insurance plans. Turns out there is still a tremendous amount of confusion and anxiety about the EUTF offerings among the hundreds of people being hired to staff the 2010 legislative session.

Then there’s EUTF administrator Jim Williams, who is stepping down at the end of the year and moving to HSTA, where he has reportedly accepted a 3-month contract as executive director effective January 1, 2010, according to a Facebook post by Big Island teacher Paul Daugherty.

Daugherty also reports that HSTA interim executive director Dwight Takeno, who has also been serving as the teachers’ union chief negotiator, is leaving to take a human resources position at the University of Hawaii.

I met Takeno a decade ago when he was the young assistant to UPW state director Gary Rodrigues. This was during the period before Rodrigues was indicted and while the UPW and it’s parent union, AFSCME, were attempting to sidestep or dismiss allegations about misconduct by the union leader. I hope Takeno learned the right lessons from that experience.

EUTF eligibility verification process puts elderly dependents at risk

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With just two weeks left for state and county workers and retirees to verify that their dependents, if any, are eligible to continue to receive health insurance provided by the State Employer-Union Health Benefits Trust Fund, there are more signs that the verification process is flawed.

Elderly retirees, in particular, may face serious issues, especially if they are unable to cope with the confusing process and demand for documentation.

Take the case of my parents. My mother will be 96 in May 2010, and my dad turned 96 early this month. She is a retiree still living at home and still handling most of her own affairs, while my dad is in a nursing home suffering from Alzheimer’s.

Luckily, my mom spoke up before the verification deadline and said she was confused about the EUTF process.

A series of mailings from EUTF and plan administrators about changing health plan choices explained that they did not apply to retirees. Then came the dependent verification mailing. It was hard to sort them all out.

The verification audit sat in her mail for a while, until she finally asked: “Do I have to do anything?”

Actually, I hadn’t paid attention to whether this applied to retirees. I said I would look.

That turned out to be easier said than done.

Despite the fact that failure to complete the process by December 31 will result in loss of health insurance coverage for dependents, there isn’t a single mention of it on the EUTF web site. Search for “dependents” on the web site and you won’t find a thing.

With more extensive digging, I finally found a link where further information was supposed to be available (FYI, it was a link that I can’t recreate now). But even access to information required an employee number, which was on the mailing sent to my mother but that I didn’t have. So I couldn’t check on it for her.

Luckily, my sister, Bonnie, was able to intervene and move the process along.

According to the instructions, my mother has choices.

She can submit her 2008 joint tax return filed as husband/wife. Except that she can’t find where she put last year’s taxes.

She has the choice of submitting a copy of her marriage license and a real property tax bill showing joint ownership. Seriously. Do you know where your marriage license is? And can your mother find her last tax bill?

I doubt that my mother would have completed the the verification audit without substantial assistance. What about others who don’t have family nearby to intervene? What about those who don’t ask for help because they don’t understand what is at stake or find the whole process too confusing?

I think a lot of retirees are going to have these problems. Things get lost in the clutter. Required documentation may be hard to find or nonexistent. Deadlines are difficult to keep in mind. I would guess that a significant number of elders may just give up and hope for the best. Others may be legally eligible but incapable of responding. There appear to be no follow-up procedures before unverified dependents are retroactively cut off from their health insurance coverage.

Prediction: There are going to be many painful stories in a couple of months when retirees find their loved ones denied medical care because EUTF has dropped dependents from the eligible list. The lawsuits probably come later when the bills accumulate. More bad press is not what EUTF needs.