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HSTA Suing State to remain in VEBA

September 15, 2010

HSTA MEDIA ADVISORY – NEWS CONFERENCE

Teachers urge delay in health care switch, warn of ongoing financial and operational deficiencies in State EUTF

The State is forcing public school teachers, through Act 106, to transfer their health benefit plans by the end of the year from the Voluntary Employees’ Beneficiary Association Trust (VEBA) to the teetering and financially insolvent Employer-Union Benefits Trust Fund (EUTF).

A class action lawsuit, Kono et al. v. Lingle, et al., was filed in the First Circuit Court today (September 14, 2010) on behalf of over 15,000 active and retired school teachers.  The lawsuit seeks to prevent the State from forcibly transferring teachers’ health benefit plans from the VEBA Trust established by the Hawaii State Teachers Association (HSTA) in 1985 to the insolvent and mismanaged EUTF.

The teachers want to retain their membership in VEBA Trust because it is both solvent and less costly to operate.  Additionally, this lawsuit seeks the return of approximately $3.9 million of surplus wrongfully taken from the VEBA Trust by the State.  The trustees of the VEBA Trust have also joined this suit as Plaintiffs.

In April 2010, Governor Lingle described the Hawaii Employer-Union Benefits Trust Fund (EUTF) as “insolvent” and noted that its “governance is untenable.” The Governor expressed concern that the EUTF would be unable to provide medical benefits to over 66,800 active state employees and retirees.

  • Plaintiff Class Representative Gail Kono is a retired special education teacher who taught for thirty years at Kaimuki Middle, Central Middle, Waipahu Intermediate, Kapalama Elementary, and Kaleiopuu Elementary Schools.


  • Plaintiff Class Representative Wray Jose currently teaches classes in U.S. History and Government at Moanalua High School, where he has taught for the last twenty years.  


This class action lawsuit was brought by Paul Alston and David A. Nakashima, of Alston Hunt Floyd & Ing.

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