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The trust that handles state and county employee health insurance is on the brink of bankruptcy. But judging from the new trustees’ first meeting Wednesday, the fund’s money woes aren’t a top priority.

The Hawaii Employer-Union Health Benefits Trust Fund — which covers about 161,000 employees, retirees and dependents — was warned by an outside consultant last year that the trust was losing an average $1.3 million a month and was nearing bankruptcy. And in his State of the State speech Monday, Gov. Neil Abercrombie referred to “runaway health costs” for public workers and retirees as a crisis.

Wednesday’s meeting of EUTF trustees stuck strictly to a that covered a single two-month-old financial update, administrative updates and reports from health insurance carriers. Yet the meeting was fraught with moments of disarray.

Missing Legislative Package

For one, the trustees haven’t set their legislative priorities. Despite a Wednesday deadline to introduce legislative measures at the Capitol, the EUTF board had only one piece of proposed legislation. Members weren’t even sure it had been submitted. The proposed bill does not help address the fund’s money problems, but instead seeks to change a filing date from a fiscal year to calendar year basis.

The state’s director of Budget and Finance, Kalbert Young, previously told Civil Beat there could be some savings in adjusting benefits and possibly switching providers. “The current provider mix and the benefits providers are insuring — conceptually there are opportunities there that could bring down premium costs,” Young said.

But these topics didn’t come up in Wednesday’s meeting. Instead, trustees want to extend existing contracts with current carriers — which expire June 30 — until the end of the year.

New Members Face Steep Learning Curve

Wednesday’s meeting featured the naming of seven new trustees. Three members were retained from the last board, though the hadn’t been updated to reflect the changes on Wednesday. Half the board is made up of state representatives, while the other five represent labor unions. The board voted and confirmed former Hawaii Tax Department deputy director Stanley Shiraki as its chairman before he had even arrived at the meeting.

Employer members

• Barbara Annis (administrative services officer for the state Department of Budget and Finance)
• Audrey Hidano (deputy director of the state Department of Labor and Industrial Relations)
• Dean Hirata (deputy director of the state Department of Budget and Finance)
• Stanley Shiraki (former deputy director of the state Department of Taxation)
• Sunshine Topping (director of the state Department of Human Resources Development)

Union members

• Kristeen Hanselman (University of Hawaii Professional Assembly representative)
• George Kahoohanohano (Retirees representative)
• Derek Mizuno (Hawaii Government Employees Association representative)
• Karolyn Mossman (Hawaii State Teachers Association representative)
• Celeste Nip (Hawaii Fire Fighters Association representative)

Most of the new trustees seem to have been thrown into the positions with little knowledge of the EUTF. For example, one trustee said during the meeting that she’d like to be able to read the statute that outlines what the board is supposed to do (Hawaii Revised Statutes, ). That remark followed comments from former state insurance commissioner J.P. Schmidt, an attorney in private practice who represents Hawaii Medical Association. Schmidt challenged a decision made by former trustees in December to move Hawaii State Teachers Association members to HMSA plans under the EUTF.

Late Reports

A one-page update from the EUTF’s financial management officer revealed that an overdue actuarial report for the state still hasn’t been issued. “We are still waiting for confirmation from the state regarding assumptions such as discount rate selection, future funding policy and method of amortization,” the report said. “Once the state confirms the assumptions, Aon Consulting will issue the final actuarial valuation report.”

A financial audit has not been completed for fiscal 2010 due to “outstanding items from outside parties” such as the fund’s liability write down amount, caused by a $1 billion investment in student-loan-backed auction-rate securities — commonly referred to as “SLARS” — the state made with Citigroup that became illiquid during the recession.

New EUTF Administrator

One bit of positive news: The fund has hired a new administrator. EUTF has been operating since last year without one. Managing the fund will be Barbara Coriell, described by the as a “longtime Dayton area actor and director” who has taken “a job as benefit plan administrator for the state of Hawaii in February.” While Coriell was at the meeting, she sat on the sidelines and wasn’t part of the discussions.

Her appointment hasn’t been officially announced by the EUTF, but the Department of Budget and Finance confirmed that she is on the job.