Do Employers Have to Provide Health Insurance in Hawaii Under the Prepaid Health Care Act?

Hawaii is the only state in the United States that requires most employers to provide health insurance to eligible employees. This requirement is part of the Hawaii employer health insurance law established under the Hawaii Prepaid Health Care Act.

Because of this law, many Hawaii business owners ask whether they are required to provide health insurance for their employees and what Hawaii employer health insurance requirements apply to their business.

Yes. Under the Hawaii Prepaid Health Care Act, most employers must provide health insurance to employees who work 20 or more hours per week. Employers must contribute at least 50% of the premium cost, and the employee’s share of the premium for single coverage cannot exceed 1.5% of the employee’s monthly gross wages.

Most Hawaii employers meet these requirements by offering group health insurance plans in Hawaii through carriers such as HMSA, Kaiser Permanente, UHA, or HMAA.

If you have only one employee, our guide to Hawaii group health insurance for one employee explains when coverage may still be required or available.

This is especially important for mainland employers. If you have even one Hawaii based worker, review Hawaii group health insurance for remote employees.

The Hawaii Prepaid Health Care Act Explained

The Hawaii Prepaid Health Care Act (PHCA) requires most employers in Hawaii to provide health insurance coverage to employees who meet certain eligibility requirements. The law was enacted to ensure that workers have access to affordable health coverage through their employer.

Under the PHCA, employers must offer a qualified health insurance plan to eligible employees and contribute toward the cost of that coverage.

Which Employees Must Be Offered Health Insurance?

Under Hawaii law, employees generally become eligible for employer-sponsored health insurance if they work 20 or more hours per week and meet other eligibility requirements.

In most cases, coverage must begin after four consecutive weeks of employment, or at the earliest time the employer’s health insurance plan allows coverage to start.

Employees who meet the eligibility requirements must be offered coverage unless they qualify for an approved exemption.

To see exactly when an employee becomes eligible, review the minimum hours required for health insurance in Hawaii.

Part-time employees may still qualify, so review Hawaii part-time employee health insurance rules before assuming an employee is excluded.

If you are wondering whether reimbursement can replace employer coverage, review Hawaii health insurance reimbursement rules for ICHRA and QSEHRA.

Minimum Employer Contribution Requirements

The Hawaii Prepaid Health Care Act also establishes minimum employer contribution rules.

Employers must:

• Offer coverage to employees working 20 or more hours per week
• Pay at least 50% of the employee premium cost
• Ensure the employee contribution does not exceed 1.5% of the employee’s monthly gross wages for single coverage

Many Hawaii employers either pay 100% of the employee premium or require employees to contribute up to the 1.5% maximum allowed under the law.

What Happens If an Employer Does Not Provide Coverage?

Employers that do not comply with the Hawaii Prepaid Health Care Act may face complaints filed by employees with the Hawaii Department of Labor and Industrial Relations.

If an employer is found to be non-compliant, they may be required to correct the issue by providing appropriate health insurance coverage and meeting the contribution requirements established under the law.

Because the PHCA rules can be complex, many Hawaii employers work with an insurance broker to ensure their health insurance plans meet all state requirements.

How Hawaii Employers Typically Provide Health Insurance

Most Hawaii employers satisfy the requirements of the Hawaii Prepaid Health Care Act by offering group health insurance through approved carriers.

Common carriers offering employer group health plans in Hawaii include:

• HMSA
• Kaiser Permanente
• UHA Health Insurance
• HMAA

Each carrier offers multiple plan options with different provider networks, benefits, and pricing structures.

Employers who need to provide health insurance for their employees can compare group health insurance plans from several Hawaii carriers to determine the best option for their business.

Employers can also review the cost of group health insurance in Hawaii when comparing available plans.

Because Hawaii has its own employer health insurance rules, most employers focus on plan design and carrier comparison rather than relying on small business health insurance tax credits.

Request a Group Health Insurance Quote for Your Hawaii Business

A group health insurance quote typically requires basic information such as the number of employees, employee ages, and preferred plan design. Once this information is submitted, employers can review available plan options and pricing.

Hawaii employers seeking assistance with group health insurance can request a quote to review available plans and ensure their business meets the requirements of the Hawaii Prepaid Health Care Act.

Businesses that must comply with the Hawaii Prepaid Health Care Act can compare group health insurance plans in Hawaii to find compliant coverage options for their employees.