Hundreds of state and county workers who retired at the end of 2009 were put into the wrong health insurance plans because of problems at the Hawai'i Employer-Union Health Benefits Trust Fund.

The errors are being corrected, with paperwork for about 350 retirees remaining to be processed. No one's health care should be affected by the problem, said Barbara Annis, deputy director of the state Budget and Finance Department.

"We greatly apologize," said Annis, who was been called in to help oversee the agency, which has been hit with the retirement of its administrator and also No. 2 in charge.

The processing delay is the latest in a series of woes for the EUTF, a agency charged with administering the health care insurance for state and county workers.

In recent weeks, the agency also had to process 1,500 filings for policy changes that came in after a filing deadline. The delay resulted in some people being placed with plan administrators that were different than what they wanted. Annis said she believes most of the 1,500 forms have been processed.

"They've (EUTF staffers) been working long hours," Annis said. "They've done as much as we could expect any employee to do."

The agency still faces questions over when a new administrator will be hired, something that could be hindered by a lack of quorum on its board of trustees. Four union representatives left the board at the end of December and the board has missed two meetings this year because of quorum issues.

The problem with the retiree paperwork resulted from timing and other problems being faced by the agency, which some say has been understaffed for years and has been hard hit by furloughs and a number of major projects and programs coinciding around the end of 2009.

Workers who didn't file their retirement paperwork until late in December faced being caught up in a process that involves the forms first going over to the state Employees' Retirement System before going over to the EUTF, which must also get a notification from the department where the employee worked, said George Kahoohanohano, chairman of the EUTF board of trustees.

He said his understanding was some of the retiree paperwork did not arrive at the EUTF until late January.

That, combined with staffing issues, an open-enrollment period that was delayed, an ongoing computer system upgrade, a program auditing membership and the retirement to top management, helped contribute to the processing problems.

'A PERFECT STORM'

There's also been ongoing complaints about changes in drug plans through the EUTF's pharmacy benefits manager, InformedRx.

"When you start putting all the factors together it does become a big problem," Kahoohanohano said.

"It's almost like a perfect storm."

He said he was told the backlog is being cleared.

Annis said the state has tried to address the situation by authorizing overtime, hiring temporary workers and seeking processing help from health plans.

There also have been reports that people who recently joined the state are having problems confirming their health insurance coverage. The wife of a recent hire said she was frantic after receiving a hospital bill for $19,500 and being unable to get confirmation of coverage from the EUTF.

The problem was resolved earlier this week. The Hawaii Government Employees Association also has reported having to intervene to get medical benefits for displaced workers under the Federal COBRA program and that some City and County of Honolulu employees had not received coverage from their date of hire.

The HGEA is also pressing for the appointment of Randy Perreira, its executive director, as an EUTF trustee. Other union candidates for the board seats are University of Hawaii Professional Assembly Executive Director J.N. Musto, United Public Workers State Director Dayton Nakanelua and Bobby Lee, head of the Hawaii Fire Fighters Association.

The HGEA has charged that Gov. Linda Lingle has not acted on the union recommendations for new board members that was delivered on Feb. 2. The EUTF is structured with five trustees from the employers and five from the unions.

"The situation at the EUTF is disgraceful and unacceptable," Perreira said in a message sent to HGEA members. "We felt we needed to personally be involved to ensure that our members' benefits would not be compromised."

The state said it had asked the unions for their trustee nominations in December reminding them the current union representatives would be leaving the board. It said it had sent another letter in January. Russell Pang, a spokesman for Gov. Linda Lingle, said she had seen the unions' recommendations before leaving for a trip to Washington and will review them again when she returns next week.

A trustee meeting has been set for Feb. 25, at which time a search committee is supposed to discuss its choice as a new administrator.

"I'm assuming we have quorum for that," Annis said.