Insurance

The main purpose of the Patient Protection and Affordable Care Act (“ACA”) is to decrease the uninsured population by increasing access to affordable health insurance.

To make it easier for people to shop for private health coverage, the ACA established “insurance marketplaces.” The marketplaces certify health plans and provide outreach assistance to people who want help applying for coverage. The marketplaces also allow people to go online to compare local health plans. Based on their income and family size, some people may qualify for tax credits to help pay monthly premiums if they buy through a marketplace.

There are several types of insurance marketplaces. Starting November 1, 2016, Hawai‘i will be using the federal website, HealthCare.gov for online application and enrollment. HealthCare.gov will have health plans certified by the state. By using the technology but retaining local jurisdiction, Hawai‘i will continue to be defined as a state-based exchange.

Last year Hawai‘i used a different marketplace, Hawai‘i Health Connector. That marketplace is closing. That means that everyone who has insurance through Hawai‘i Health Connector must reapply in order to continue their coverage.

Important information:

Everyone who has coverage through the Connector today will have to reenroll. Hawaii Health Connector cannot transfer its clients’ identifying information to HealthCare.gov because of strict security protocols.

Open enrollment starts on November 1, 2015. It closes on January 31, 2016.

Here are the important deadlines for enrollment:

For coverage to start January 1, 2016, enroll by December 15, 2015
For coverage to start February 1, 2016, enroll by January 15, 2016
For coverage to start March 1, 2016, enroll by January 31, 2016

To apply and enroll, you can go directly to HealthCare.gov. If you want local assistance to apply and enroll you can start at HawaiiHealthConnector.com to get an appointment with a local Kōkua (navigator) or to find a local enrollment event.

Individual mandate:

The goal of the ACA is to make sure everyone has insurance coverage. To ensure that people with insurance aren’t paying the cost of those who are uninsured, the ACA also created what is known as the “individual purchase mandate.”

The ACA individual purchase mandate requires all U.S. citizens, U.S. nationals, Permanent Residents and lawful resident aliens to have an acceptable level of health insurance, unless they are exempt under federal guidelines. People who are not exempt and who reject access to insurance will be subject to a penalty when they file their tax returns.

There are exemptions to the mandate. For more on the Individual Mandate go here: https://www.healthcare.gov/fees-exemptions/fee-for-not-being-covered/

Fees for not having coverage:

If you don’t have coverage in 2016, you’ll pay the higher of these two amounts:

• 2.5% of your yearly household income; or
• $695 per person ($347.50 per child under 18).

Remember, based on income, you may qualify for tax credits to make insurance more affordable and avoid the fees. You can learn more at HealthCare.gov.

The ACA also changed the rules so that no one can be denied coverage because of a pre-existing health condition. ACA compliant plans are required to base rates only on age, tobacco use, and whether the insurance applicant is an individual or family. These plans are available at the same price, either on or off HealthCare.gov.

The ACA mandated certain preventive services. The ACA 10 Essential Health Benefit categories provide a minimum floor of coverage and a new rating methodology for plans sold to individuals and small businesses.

Individuals with an annual household income between 139 and 400 percent of the Federal Poverty Level may qualify for tax credits. Note that the Federal Poverty Level for Hawaii is different from the Federal Poverty Level for Alaska and the 48 contiguous states. These tax credit programs are only available with health plans purchased through HealthCare.gov.

ACA creates new requirements for individuals and small businesses, but Hawaii private employers (regardless of size) must recognize that the 1974 Hawaii Prepaid Health Care Act still applies even after the passage of ACA. Therefore, much of the FAQ and general information available on the federal government websites is not always correct when applied to Hawaii employers and employees. Please go to https://labor.hawaii.gov/dcd/about-phc/ for more information on the Prepaid Health Care Act.