VEBA

My sample testimony

Dear Senator,

My name is Egan Kawamoto and I teach at Wheeler Middle School. Please hear bill SB2797. VEBA helps teachers and its sunset should not be based on a flawed report.

The auditor’s report is flawed.
1. The report says that the premiums paid by the state would decrease. History shows that this is not true. The cost to the state did not decrease and the premiums were higher than projected. When moved to the EUTF teachers faced significant increases in their costs as well as a decrease in their benefits.
2. The report states that the administrative costs were duplicated. When in fact those costs are set and will not be a savings but would be transferred to the EUTF.
3. The report fails to report that during those years the Department of Education (DOE) realized lower contribution rates for teachers (from March 1, 2006 through June 30, 2009, the employer contribution savings was $3,145,309.00). In addition, the State of Hawaii General Fund received experience refunds for teachers totaling $3,518,760.00. The DOE and the State of Hawaii realized a total savings of $6,664,069.00 from March 1 2006 through June 30, 2009. For Retirees, the State of Hawaii has essentially been at breakeven between contributions, costs, and refunds as compared to EUTF.

The EUTF is not well run.
1. The trustees have not met in January and February. Though the governor insists that this is due to the unions, I do not care who is responsible. A group responsible for the health plans for government workers should work smoothly.
2. They have misplaced @1500 enrollees. What will happen when there is a need to enroll @13,000 teachers?
3. The public unions are calling for a reorganization of the EUTF. I believe there are bills to that effect.

The EUTF does not operate proactively.
1. The cost of our health benefits will increase hence the cost to the state will also increase. This I feel is caused by the inability to actively negotiate with the providers. It is because of the VEBA trust that HMA/Summerlin is involved and HMSA changed their policy to allow more choice in the EUTF.
2. The cost of maintenance drugs is handled by an out of state entity. This causes a loss of revenue to the state and also does not support local businesses.
3. They should know that there has been no adverse selection since the law requires that all teachers in Bargaining Unit 5 must be enrolled in the VEBA plan as an employee.

While I have usually been swayed by the auditor’s reports this report leaves much to discuss. It basically asks you to make a decision based on a lack of information.

Sincerely,
Egan Kawamoto