What Small Businesses Need to Know

A small business is defined as a company that has up to 50 full-time employees.

Current HMSA groups

We’ve got great news for you. Because of decisions made by President Barack Obama and the state insurance commissioner, HMSA is offering you and your employees the same health plan you currently have for another year.

What does this mean for you? Several things:

  • If you’re adversely affected by age rating, you can now choose to stay with HMSA and avoid age rating of your employees and their dependents for another year.
  • If you renewed your policy with HMSA before October 1, 2014, you can keep your current plan for another 12 months through 2015. For example, groups that renew on July 1, 2014, can extend their plan through June 30, 2015.
  • Please keep in mind that if you extend your current plan, your rate will be adjusted only to cover government fees and taxes and the expected rise in medical costs.

HMSA Plans for Small Businesses

A healthy employee means a healthy business. We can help you get there and stay there.

Tax credits available

Businesses that use the Hawai‘i Health Connector to buy employee health plans may qualify for a tax credit of up to 50 percent if they have an equivalent of up to 25 full-time employees with average wages of less than $50,000. There’s a lot of paperwork to fill out, so check with your tax adviser.

HMSA health plans will not be available on the Hawai‘i Health Connector starting January 1, 2015.

Find out if you’re eligible and what you need to do.
Not sure if you qualify for the health insurance tax credit? Use this easy guide.

Premiums are changing

Starting in 2014, health plan premiums for Affordable Care Act plans will be based on your employees’ age. Health plans for older employees may cost more than plans for younger employees.

Also, the federal government will pay for health care reform changes with new fees and taxes imposed on health insurers nationwide, including HMSA. This will add costs to health plan premiums.

Benefits are changing

Starting in 2014, Affordable Care Act Plans will include:

  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

Your part-time employees will need coverage

You’re not required to offer health care coverage to your part-time employees who work less than 20 hours a week. However, they’ll need coverage by March 31, 2014, or will have to pay a fine to the Internal Revenue Service. Those employees can buy an HMSA individual health plan directly from us or in 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 in the Connector.

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.
  • Starting in 2014, report your employees’ minimum essential coverage annually to the Internal Revenue Service. Large employers with at least 50 full-time equivalent employees must file additional information about fulfilling their responsibilities.

Dependent coverage

Do you offer your employees a B status plan under Hawaii’s Prepaid Health Care Act? If you do, state law requires you to provide coverage to your employees’ dependents and pay at least half of that coverage. If you don't offer a B status plan, you’re not required to offer dependent coverage.

They can still get coverage by contacting us. We’ll help them choose a plan. They can also buy an HMSA plan in 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 in the Connector.

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

Remind your employees that health care reform requires almost everyone to get coverage by March 31, 2014, or pay a fine to the Internal Revenue Service. And no one will be turned down for coverage even if they have a serious health condition. So it’s important that everyone has coverage.

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 the state marketplace?

The state marketplace is an online marketplace where people can buy health insurance. It’s called the Hawai‘i Health Connector and will be available on October 1, 2013.

Do I have to use the marketplace for employee health plans?

No. You’re not required to use the marketplace for employee health plans. You can continue to work directly with HMSA.

Why is the state creating the marketplace?

The health care reform law requires states to have a marketplace. By March 31, almost every American must have health insurance or risk paying a fine to the federal government.

Will HMSA health plans be in the marketplace?

Yes. HMSA health plans will be in the marketplace. However, you can work directly with HMSA instead.

Who can use the marketplace?

Small businesses with up to 50 full-time employees and people who buy individual health plans on their own can use the marketplace.

Does health care reform affect 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.

What’s the benefit of buying a health plan through HMSA?

We can provide a smooth transition to plans that comply with health care reform and avoid disruption to your employees’ benefits and services. HMSA will help you choose health plans based on your employees’ health and financial needs. And HMSA representatives are always available to answer your questions.

What’s the benefit of buying a health plan in the marketplace?

Small businesses that use the marketplace may qualify for a tax credit of up to 50 percent for two years starting in 2014. To qualify, you must have an equivalent of up to 25 full-time employees with average wages of less than $50,000. You’ll need to fill out a lot of paper work, so check with your tax adviser. Also, the marketplace will send employers one consolidated bill for employee health plans, just as HMSA will.

Will health plan premiums go up?

HMSA and other health plans are required to pay new health care reform fees and taxes to the federal government. This will add to the cost of your health plan. We’re doing all we can to lessen costs with technology tools like HMSA’s Online Care and our Cozeva patient-doctor communications system.