The Hawaii Prepaid Health Care Act (PHCA) is a state law that was enacted June 12, 1974 in the State of Hawaii to improve health care coverage by employer mandate. The PHCA, which appears in Chapter 393 of the Hawaii Revised Statutes, requires private sector employers to provide minimum health care coverage to eligible employees. This insures protection against the high cost of medical and hospital care for non-work related illness or injury.
According to the Hawaii Prepaid Health Care Act, employers must provide health care coverage to employees who work at least twenty hours per week and earn 86.67 times the current Hawaii minimum wage a month. In contrast, the federal law requires employers to offer coverage to employees working at least 30 hours per week effective January 1, 2014. Under the PHCP, employers may pay the entire cost of the health insurance premium or share the cost with their employees. Except for certain union agreements, the law requires employers to contribute at least half of the premium cost for single coverage.
Prior to President Obama’s signed legislation in the Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010, Hawaii was the only state in the country that required employers to provide health insurance for their full-time employees. In fact, this new health care law has a “carve out” for Hawaii employers, which states that the federal law does not “modify or limit the application of the exemption for Hawaii’s Prepaid Health Care Act.” There are, however, some provisions that will still affect Hawaii employers, such as tax credits for small employers, early retiree subsidies, and reporting requirements for tax forms.
Hawaii consistently has one of the lowest medically uninsured rates in the United States, with about 9 percent (or 120,000 people) of the population uninsured. Comparatively, the nation has 46 million uninsured. Many people claim that the state’s low uninsured rate is directly linked to the Hawaii Prepaid Health Care Act. Health insurance is an investment in the health of your employees, and ultimately an investment in the health of your business. Having access to quality care keeps people healthy.