For the first time, the state has begun setting aside money to address a $16 billion unfunded liability for retiree health care benefits.

The state made an initial $100 million deposit Monday to the Hawaii Employer-Union Health Benefits Trust Fund, or EUTF, to begin pre-funding what is known as public employee other-post employment benefits, or retiree benefits that include medical insurance and life insurance. Pension payments are not included.

Previously the state opted to "pay as you go," meaning paying only for the annual expenses of the EUTF.

Gov. Neil Abercrombie signed into law a year ago a measure requiring the state and counties to make annual payments toward a massive unfunded liability in the EUTF, putting the state on a more stable financial path.

The law commits the government to a payment schedule and, starting in fiscal year 2018, authorizes the state budget director to divert the counties’ share of general excise tax and hotel room tax revenues if the payments fall short of targets set by an actuary.

"After decades of this issue being ignored, today we are taking action by beginning to pre-fund — and pay down — our (other-post employment benefits) liability," Gov. Neil Abercrombie said in a press release. "This is the first step in many that are required to address this long-standing liability."

Lawmakers and the governor already included $100 million in the state budget for fiscal year 2014 and $117 million for fiscal year 2015 toward the health care fund for public employees. Financial experts have estimated that the state would have to pay $500 million a year for 30 years to satisfy the liability.