State Marketplace Profiles: Hawaii

Final update made on November 6, 2013 (no further updates will be made) 

Establishing the Marketplace

On July 11, 2011, Governor Neil Abercrombie (D) signed SB 1348 into law establishing the Hawaii Health Connector, a State-based health insurance Marketplace.¹ 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.²

Structure: The legislation established the Hawaii Health Connector as a non-profit corporation.

Governance: Governance: Beginning on July 1, 2012, the Connector transitioned from an interim board to a final 15-member board appointed by the Governor and with the advice and consent of the Senate. Four non-voting ex officio members (or their designees) are the Director of Commerce and Consumer Affairs, the Director of Health, the Director of Human Services, and the Director of Labor and Industrial Relations.

Current appointed Board members are:

• Sherry Menor-McNamara (Chair), Chamber of Commerce of Hawaii
• Michael Gleason (Vice-Chair), The Arc of Hilo
• Cliff Alakai (Treasurer), Maui Medical Group
• Gwen Rulona (Secretary), UFCW Local 480
• Clementina Ceria-Ulep, University of Hawaii at Manoa, School of Nursing and Dental Hygiene
• Joan Danieley, Kaiser Foundation Health Plan, Inc.
• Jennifer Diesman, Hawaii Medical Services Association
• Robert Hirokawa, Hawaii Primary Care Association
• Faye Kurren, Hawaii Dental Service
• Christine Mai`i Sakuda, Hawaii Health Information Exchange
• Hardy Spoehr, Papa Ola Lokahi

In December 2011, the Interim Board hired an Executive Director.

The Connector’s bylaws require the development of five standing committees: Audit and Finance, Legal Policy, Data Access and Technical Infrastructure, Community Outreach, and Community Advisory.³ The Interim Board also voted to create a standing Individual and Employer Consumer Advisory Committee in April 2012 and the permanent Board voted to create a Governance Committee in July 2012.⁴

In May 2012, the Connector issued conflicts of interest policies, building on those set by the Interim Board in the previous year.⁵ The policies require that employees and Board Members of the Connector recuse themselves from any decision or discussion in which they believe they have a conflict of interest.

Contracting with Plans: The Connector will serve “as a clearinghouse for information on all qualified plans and qualified dental plans listed or included in the Connector.” The decision to operate the Connector as a clearinghouse was reaffirmed in November 2012, though the question will be revisited if there are additional entrants to the insurance market.⁶ In addition, the Insurance Commissioner will retain full regulatory jurisdiction over plans and determine inclusion eligibility, provided that all qualified health plans (QHPs) that apply are included in the Connector.

In December 2011, the Interim Board recommended that insurers offering QHPs through the Connector’s small group market should be required to offer QHPs through the Connector’s individual market; however, the same plans do not need to be offered in both Marketplaces.⁷ The Insurance Commissioner should be empowered to grant waivers to insurers able to demonstrate that compliance with this requirement would increase the risk of insolvency or financial hardship. Insurers participating on the Connector are not required to offer coverage outside the Marketplace. In addition, insurers offering QHPs through the Connector should be required to offer the plans to all consumers in all geographic areas of the state.

The Insurance Commissioner approved 95 plans to be sold through the Connector, including about 30 dental plans. Two health insurers, Kaiser Permanente and the Hawaii Medical Service Association, will participate on the Marketplace in 2014.⁸ Information on plan availability and rates may be viewed by logging onto the Connector portal.

Risk Adjustment, Reinsurance, and Risk Corridors: Hawaii intends to use federal government services to administer its risk adjustment and reinsurance programs.⁹

Consumer Assistance and Outreach: In May 2013, the Connector released a Request for Applications (RFA) to solicit applicants for the Marketplace’s consumer assistance program, known as the Hi’i Ola Marketplace Assister Program. The Hi’i Ola Program is comprised of Navigators, In-Person Assisters, and Certified Application Counselors, collectively called “Kokua.” In August 2013, the Connector awarded grants to 34 community partners to support outreach and education efforts and facilitate enrollment through the Marketplace.¹⁰ All Kokua are trained to conduct public education activities and facilitate enrollment in QHPs, and by late October, 86 individual Kokua had been trained and certified.¹¹ Kokua are available on every island, and the Connector website features a tool that allows consumers to search assisters by zip code. A subsidy calculator and a small business tax credit calculator are also available on the website.

In August 2013, the Connector launched a marketing campaign, including print, television, radio, and online advertising, to raise awareness of the Marketplace. The Connector has also participated in a variety of outreach events to engage stakeholders across the state. Outreach activities include presenting to over 100 business and professional organizations, establishing a presence at dozens of community events, and meeting with state legislators.¹² The Hawaii Health Connector customer support center opened in late September and offers assistance in ten languages.¹³

In April 2013, the Board decided to allow agents/brokers to enroll individuals and small employers into health insurance coverage through the Marketplace.¹⁴ Agents/brokers must be licensed in the state and complete an online training course to become certified to sell coverage through the Connector.¹⁵

Small Business Health Options Program (SHOP) Marketplace: Employers with 50 or fewer employees will be eligible to purchase coverage through the SHOP Marketplace, and beginning on January 1, 2016, employers with up to 100 employees may purchase coverage on the Connector.¹⁶ The Connector worked with several state agencies, contractors, and the federal government to integrate current Prepaid Health Care Act requirements with the ACA, and in June 2013, the Board approved a recommendation. Employers offering QHP coverage to their employees will make available multiple QHPs from one or more issuers, select a metal level and make all plans at that level available, or allow employees to choose any plan on the Marketplace. Regardless of whether employers offer a PHCA plan or a QHP, they will select a reference plan to set their contribution limit. Employees must pay the difference in cost if they select a more expensive plan.¹⁷

Financing: In August 2013, the Board approved a sustainability plan to assess issuers a user fee of 2% of monthly premiums charged for QHPs sold through the individual Marketplace, beginning January 1, 2014. Beginning July 1, 2014 the Connector will charge issuers the same fee for QHPs sold through the SHOP Marketplace.¹⁸

Essential Health Benefits (EHB): The Affordable Care Act requires that all non-grandfathered individual and small-group plans sold in a state, including those offered through the Marketplace, cover certain defined health benefits. The Governor’s office partnered with the DCCA and DHS to examine possible EHB plans and collect feedback through two public forums. On October 1, 2012, the Governor announced that the state had selected the HMSA Preferred Provider Plan 2010 as the EHB benchmark.¹⁹

Marketplace Funding

The Hawaii DCCA received a federal Exchange Planning grant of $1 million. In November 2011, the DCCA awarded a Level One Establishment grant of $14.4 million to create a web portal for the Connector. In August 2012, the Department of Health and Human Services was awarded a second Level One Establishment grant of $61.8 million to support outreach efforts, design and develop IT architecture and engage a quality assurance.²⁰

Next Steps

On January 3, 2013, Hawaii received conditional approval from the U.S. Department of Health and Human Services (HHS) to establish a State-based Marketplace.²¹ The Hawaii Health Connector portal became operational on October 15 and began enrolling qualified individuals, families, and small businesses into coverage.

Additional information about the Hawaii Health Connector can be found here: http://hawaiihealthconnector.com/.