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The Honolulu Advertiser
Posted on: Wednesday, April 28, 2010

Health fund trustees delay decision

BY Greg Wiles
Advertiser Staff Writer

Trustees at the Hawaii Employer-Union Health Benefits Trust Fund want more information before they make a decision on a possible 26.2 percent increase in health insurance premiums for many state and county workers.

The trustees delayed action on a proposal to raise rates for members under the fund's preferred provider plans at a meeting yesterday.

Trustees instead asked for more information as they looked for ways to lower a hike in premiums.

"We have a responsibility to keep premiums as reasonable and as feasible for employees as well as employers," said trustee Barbara Annis.

Trustees have been looking for ways to deal with grim finances for the preferred provider plans it offers after being told the fund is projected to run out of money sometime this year.

Neither the Legislature or Gov. Linda Lingle's administration has kicked in funds to cover the plans' rising expenses, forcing trustees to contemplate one of two solutions raising premiums or cutting benefits.

Lingle had urged lawmakers two weeks ago to enact last-minute legislation that would lower benefits and make other changes so the fund would remain solvent. Lawmakers have not acted on her request and questioned why Lingle didn't seek an emergency appropriation for the fund as an alternative.

Any increase in premiums could come atop last year's average increases of 23 to 24 percent

Trustees yesterday probed the latest financial statement for the fund, asking whether new information about an unexpected $7.2 million increase in reserves changed any projections.

Aon Consulting, its benefits adviser, said the latest news wasn't enough to change its view about the plans running out of money later this year unless premiums are increased.

The trustees also were warned that waiting to decide on a rate hike might result in needing a bigger increase if there's a spike in usage and expenses during the next month.

Currently Aon's projections show the fund needing to raise rates by 17.4 percent on July 1 to keep up with benefit costs, with another 8.8 percent needed to rebuild reserves.

Trustees also queried Aon representatives about whether savings are being achieved from changes made to benefits and offerings in the past year, and whether the possibility of the inclusion of teachers as part of the fund will be beneficial.

These and other questions are to be researched by Aon before the EUTF meets again next month.