What Large Businesses Need to Know

Health care reform changes

  • Dependents up to age 26 can stay on their parents’ family health plan if that plan offers dependent coverage.
  • Certain preventive benefits are available at no additional cost to members, including:
    • Blood pressure screenings
    • Breast-feeding support and counseling
    • Cholesterol screenings
    • Colonoscopies
    • Flu shots
    • HIV screening and counseling
    • Mammograms
    • Well-woman exams

Marketplace

Starting October 1, 2013, the state will launch the Hawai‘i Health Connector, an online health insurance marketplace. Employers can continue to get employee health plans directly from HMSA. The state will decide later if businesses with more than 100 employees can use the marketplace starting in 2017.

Only small businesses and people who have individual health plans can use the marketplace. The state's definition of a small business in Hawaii is:

  • 1 to 50 full-time employees for 2014 and 2015.
  • 1 to 100 full-time employees starting in 2016.

Part-time employees who don’t have coverage

Starting in 2014, people who don’t have health insurance could pay a fine to the federal government. Part-time employees who don’t have coverage through their job can buy a health plan directly from HMSA or in the marketplace. Depending on their income, they could be eligible for financial help in the marketplace to pay for health insurance.

Essential Health Benefits

If large businesses offer any essential health benefits (EHBs), those benefits’ out-of-pocket limits are $6,350 for individuals and $12,700 for a family in 2014. EHBs are:

  1. Prescription drugs
  2. Ambulance service
  3. Emergency care
  4. Hospitalization
  5. Laboratory services
  1. Maternity and newborn care
  2. Mental health and substance use services
  3. Pediatric oral and vision services
  4. Rehabilitation and habilitative services
  5. Services for preventive care, wellness, and chronic disease management

Only health plans for small businesses with up to 50 full-time employees and people who buy individual health plan coverage on their own are required to include EHBs.

Hawaii’s Prepaid Health Care Act

Hawaii businesses must still comply with the state’s Prepaid Health Care Act. This 1974 law requires employers to provide health insurance for employees who work 20 hours or more a week for four weeks in a row (with some exceptions). Employers must contribute at least half of the employee’s premiums for single coverage. The employee contributes the rest, but no more than 1.5 percent of their wages.

New fees and taxes

To pay for health care reform changes, the federal government will impose new fees and taxes on health plans nationwide, including HMSA. This will increase premiums. We know cost increases are a hardship on businesses. We’re doing all we can to ease that burden by helping improve the care your employees receive, which will help contain costs.

Dependent coverage

Do you have to provide health care coverage to your employees’ dependents? It depends on the type of plan you offer.

A status plan: Hawaii’s Prepaid Health Care Act doesn’t require you to offer dependent coverage. However, federal health care reform requires you to offer dependent coverage starting in 2015. Until then, your employees’ dependents can contact us directly for coverage. They can also buy an HMSA plan on the Hawai‘i Health Connector, the state’s online health insurance marketplace. Depending on their income, they could be eligible for financial help to pay for health insurance if they buy it on the Hawai‘i Health Connector.

If you offer employee family coverage, dependents up to age 26 could get coverage under the family plan.

B status plan: Hawaii’s Prepaid Health Care Act requires you to provide coverage to your employees’ dependents and pay at least half of that coverage.

To-do Checklist for Employers

Health care reform requires you to:

  • Report the value of your employees’ benefits on their annual W-2 form beginning with the 2012 forms. Some employers are exempt from this requirement for now, including employers who file less than 250 W-2s, multiemployer plans, health retirement account plans, and self-insured plans not subject to COBRA rules.
  • Voluntarily report your employees’ minimum essential coverage annually to the Internal Revenue Service. Large employers with at least 50 full-time equivalent employees have additional information to report. Although employers won’t be penalized for not complying, they’re highly encouraged to report the information to the federal government.

This information is based on HMSA’s review of the Affordable Care Act (ACA). This overview is intended for educational purposes only and should not be used as tax, legal, or compliance advice.

Frequently Asked Questions

What is health care reform?

  • Health care reform is the Affordable Care Act, which was signed into law by President Barack Obama in 2010.
  • It is legislation that aims to:
    • Make health care more accessible for all Americans, including the uninsured.
    • Make health care more affordable by eventually lowering costs.
    • Improve people’s health by increasing the focus on preventive care.

What does health care reform do?

  • It adds preventive benefits to health plans at no additional cost to health plan members.
  • It adds benefits such as laboratory tests, pediatric oral and vision services, and prescription drugs to health plans for small businesses.
  • It allows dependents up to age 26 to stay on their parents’ health plan.
  • It provides health care tax credits for eligible small businesses.

What's the state health marketplace?

  • The state health marketplace is an online marketplace where individuals can go to buy health coverage.
  • Large businesses that have employees who do not qualify for employee-sponsored health plans can send those employees to the state health marketplace or directly to HMSA where we will help them sign up for an individual health plan.
  • Here in Hawaii, the marketplace is called the Hawai‘i Health Connector.

When will the marketplace open? When can I refer part-time employees to the marketplace?

The state health marketplace will open on October 1, 2013.

Can my part-time employees qualify for financial help if they go through the marketplace?

Maybe. Part-time employees who are not offered health coverage through your group plan may qualify for financial help based on their income.

Do I still need to provide health coverage for my employees?

  • Yes. Hawaii businesses must still comply with the state’s Prepaid Health Care Act.
  • This law requires employers to provide health insurance for employees who work 20 hours or more a week for four weeks in a row (with some exceptions).
  • Employers must contribute at least half of the employee’s premiums for single coverage. The employee contributes the rest, but no more than 1.5 percent of their wages.

Will large businesses eventually be able to go to the marketplace?

The state has the option of expanding eligibility of the marketplace to large employer groups in 2017.

Will I have to pay more now?

The federal government will pay for health care reform with new fees and taxes imposed on health insurers nationwide, including HMSA. This will raise health plan premiums.

Where can I go if I have questions?

Call your HMSA representative at 948-6387 on Oahu or 800-465-4672 toll-free on the Neighbor Islands, Monday through Friday, 8 a.m. to 5 p.m.