Starting in 2014, as part of the Affordable Care Act (ACA), health insurance coverage for individuals and small businesses will become available through new state health insurance exchanges. Most importantly, the key tax credits (e.g. the small business healthcare tax credits) and tax subsidies (e.g. individual health insurance tax subsidies) will only be available for coverage purchased via a state health insurance exchanges.
Build a State-Based ExchangeAll states have three options for setting up a state health insurance exchange for 2014:
Enter into a State-Federal Partnership Exchange
Default to a Federally-Facilitated Exchange
Hawaii plans to offer a state-based exchange. The Hawaii Health Insurance Exchange will open in October 2013, for coverage starting January 1, 2013.
Hawaii Health Insurance Exchange - What is it?
The Hawaii Health Insurance Exchange will be an online health insurance marketplace. The Hawaii Health Insurance Exchange will help individuals and small businesses shop and compare health insurance choices, and take advantage of new health care reform tax credits and subsidies. According to Exchange website, the vision is to "help the people of Hawaii live happier and healthier lives by making quality health insurance accessible to all, making the acquisition of health insurance affordable and simpler, and by improving the integration between public and private health plans."
Individuals seeking health coverage through the Hawaii Health Insurance Exchange will find out if they are eligible for the following tax credits and subsidies:
Tax credits: Tax credits will be available to lower the cost of health coverage for individuals and families who meet income requirements and do not have health insurance from an employer or a government program. The tax credits will be immediately applied to the individual's insurance premium, reducing the amount they pay each month. Individuals and families who make between 138% and 400% of the federal poverty level may be eligible for the tax credit. This means that an individual making up to $44,680 and a family of four earning up to $92,200 may be eligible for a tax credit.
Cost-sharing subsidies: Cost-sharing subsidies will reduce the amount of out-of-pocket health care expenses an individual or family has to pay. These expenses may include the co-payments for health care services or other costs.
Hawaii's small business exchange ("SHOP") will be available for small businesses with 100 or less full-time employees. The Hawaii Health Insurance Exchange estimates that employers with over 100 employees will be able use the SHOP by 2017.
Hawaii Health Insurance Exchange - How was it Formed?
On July 11, 2011, Governor Neil Abercrombie signed SB 1348 into law establishing the Hawaii Health Insurance Exchange. The law builds on Hawaii’s Prepaid Health Care Act of 1975 (PHCA) which required nearly all employers to provide health insurance to employees working 20 or more hours a week for four consecutive weeks. The legislation established the Exchange as a non-profit corporation. On January 3, 2013, Hawaii received conditional approval from the U.S. Department of Health and Human Services (HHS) to establish a state-based exchange.
Hawaii Health Insurance Exchange - Role of Insurance Professionals
Hawaii has not publically released the formal role, and compensation structure, for agents and brokers selling policies on the Hawaii Health Insurance Exchange. Based on public governance meeting notes (March 14, 2013), the Exchange is discussing a model where producers (not acting as official Navigators) would receive a type of compensation, fee or stipend. According to these public meeting notes, the Exchange recognizes the importance of agents and brokers in the Exchange. At the time of writing details have not been decided or released confirming the fee structure and who would pay the fees (exchange vs. carriers).
Hawaii Health Insurance Exchange - Role of Navigators
Navigators, as required by ACA, will be available across Hawaii to assist individuals and small businesses “navigate” the decision-making process required to purchase health insurance or seek qualification for Medicaid. They will also assist individuals who need help accessing the website. Special outreach will be made to Native Hawaiian communities. Final details about Hawaii's Navigator program has not been released at the time of writing.