To the more than 150,000 employees of small businesses in Hawaii, the Prepaid Health Care Act is a well-known mandate.
It requires that each employee who works 20 or more hours per week will be provided with health insurance.
This has helped Hawaii to reduce the number of uninsured residents to one of the lowest rates in the nation.
But as every owner of a small business in Hawaii knows all too well, in the past 40 years since Prepaid became the law, it has not reduced health care costs, which only get higher every year.
While many employers understand the positive impact of providing health coverage to employees, they also understand that paying for ever-increasing health care costs is one of the most difficult challenges facing all business owners. It’s hard to make ends meet when annual rate increases far outpace the overall inflation rate year after year.
The Affordable Care Act goes beyond Prepaid in several important ways. One feature has not received much attention, but could have an impact for businesses by controlling the growth of health care costs over time. It’s called consumer choice.
All ACA health insurance exchanges, including the Hawaii Health Connector, must provide consumers with the ability to easily compare health plan benefits and prices of different insurers, side by side.
This convenient "shop and compare" feature is designed to help consumers, including business owners and their employees, choose the benefit level and price that best fits their health care needs and their budgets.
This consumer choice function is required by the ACA in order to promote price competition through transparency in the online insurance marketplace.
So far, it appears consumers are taking advantage of this greater transparency through the Connector. Those who have signed up are using our "shop and compare" feature to make better choices and, in some cases, save money.
As some small businesses compare options on the Connector, they may find that staying with an existing pre-ACA plan is a better choice and could cost less. Our point is that either way, you should make an informed choice. Otherwise you could be giving up a good deal without even knowing it.
A report from Families First estimates that more than 11,000 small businesses qualify for ACA tax credits in Hawaii to offset the cost of health insurance premiums. From 2014, those credits are only available for plans purchased through the Connector.
Many small businesses also can get tax credits for past tax years back to 2010. Check with us or your tax preparer for more details.
We are committed to improving our website and our in-person services to help small business and their workers enroll in health plans. We understand that their enrollment experience should be fast, easy and affordable. And we want to work with the small business community to better understand their needs and make the Connector better.
While our focus right now is to help small businesses, this fall, we look forward to helping individuals enroll in health plans during the next ACA open enrollment starting Nov. 15.
We also look forward to working with the Innovation Waiver Task Force created by the Legislature to tackle the important and complex question about how to take advantage of the ACA’s innovation waiver option in 2017, to adapt the Connector’s services to better fit the needs of individuals and small businesses in our state.
Tom Matsuda is interim executive director of the Hawaii Health Connector.
