Another Bleeding Year for Hawaii’s Public Employee Health Insurance Fund
The trust fund that pays for Hawaii state and county employees’ health insurance ended the 2010 fiscal year nearly $5 million in the red, according to issued late Thursday.
The long-overdue financial audit, performed by Macias Gini & O’Connell of California, covers the year ended June 30, 2010. A report for fiscal 2011 is expected before December.
The $5 million deficit was an improvement over the prior year, when the Hawaii Employer-Union Health Benefits Trust Fund was $17.7 million in the red.
The fund generated revenues of $263.06 million and expenses of $250.3 million. The fund would have seen a positive $12.7 million balance for the year, had it not been for inheriting the previous year’s negative $17.7 million ending balance. That resulted in the negative $4.92 million as of June 30, 2010.
The EUTF oversees health and life insurance benefits for 171,025 public workers, retirees and their dependents. That includes 53,900 active employees, 39,285 retirees
, and 77,840 dependents, according to the audit.
During the year that ended June 30, 2010, the state and counties contributed $513.2 million into the fund while employees contributed $160.1 million. The EUTF paid out $590.7 million in premiums and self-insured claims. Medicare Part B reimbursements for retirees accounted for an additional $44.8 million.
Active Employees vs. Retiree Benefits
The EUTF is split into two parts. The enterprise fund, covering active employees and their dependents, reported $45.5 million in total assets for the year — an increase of $6.4 million, or 16.5 percent, over the previous budget year. The fund listed $50.4 million in total expenses — a decrease of $6.3 million, or 11 percent.
The report said the higher assets were tied to increased employee rates that kicked in that year. It attributed the decrease in expenses to a drop in benefit claims expense.
The so-called agency fund, which covers retirees and their dependents, reported assets equal to its liabilities for the past two years. The fund had assets and expenses both totaling $226.4 million for the year.
On top of annual operating expenses, the EUTF faces about $14.5 billion in unfunded liabilities, according to the valuation report. That reflects the amount taxpayers owe for future retiree health benefits.
State government retirees are eligible for full and partial health insurance for themselves and their dependents, based on their hire date.
