Hawaii’s newest medical insurer is ramping up to gain more market share as the bulk of small businesses renew health plans in July.
Family Health Hawaii, which launched Oct. 1 as a nonprofit mutual benefit society, has roughly 4,000 employees so far on its rolls, or about half of its annual enrollment goal, said former state Insurance Commissioner J.P. Schmidt, who is heading the startup insurance firm.
Despite running into "serious delays" in getting government approvals to begin operations, the company is ahead of its financial goals, he said.
"We are ramping efforts across the board as we continue to grow," Schmidt said. "We have a lot of Hawaii businesses contacting us, and they’re very excited to see an alternative in the market. It’s normally slower in the beginning as you get established, then the pace of new sign-ups picks up later. Even though we got a late start, we’ve already exceeded our projections."
The company, with a goal of 40,000 members in the first five years, is offering four plans with an average premium of $340 for a single employee. It has signed up numerous small businesses and a number of large companies including Roberts Hawaii, he said.
The company received approval from the state Insurance Division to raise rates by 3.9 percent this year. By contrast, Hawaii Medical Service Association, the state’s largest health insurer, is boosting rates by 8.9 percent July 1 for 110,000 consumers and 8,500 small businesses.
"We have generally been lower in our premiums than the competition," Schmidt said. "That’s what we’re structured to do, to provide better premiums."
The small insurance carrier began doing business on the same day as the state’s health insurance exchange, Hawaii Health Connector, the troubled online marketplace created by the federal Affordable Care Act, also known as Obamacare.
The Insurance Division had been inundated with work reviewing dozens of Connector health plans, so Family Health’s policies were put on the back burner, which meant the firm missed the opportunity to capture a share of small-business renewals in July, Schmidt said. The insurer had hoped to start selling health policies in May 2013.
"That resulted in serious delays for us," he said. "We had to continue paying all of our own administrative expenses as we waited months for our filings to be looked at and approved."
Like the state’s other smaller carriers — Hawaii Medical Assurance Association and UHA (University Health Alliance) — Family Health is hoping to find a niche in the small-business market.
Family Health Hawaii contracted two outside parties to handle business functions. Hawaii-Mainland Administrators LLC will take care of claims administration, and Health Management Network will provide the physicians. Both HMA and HMN were previously owned by IMX Cos., the former parent company of defunct Summerlin Life and Health Insurance Co., which opened in 2004 in Hawaii.
Summerlin withdrew from the market in 2010 after failing to gain enough market share in an industry dominated by HMSA and Kaiser Permanente Hawaii.
