Hawaii - Prepaid Health Care Act

Established January 1, 1975, The Prepaid Health Care Act requires nearly all employers to provide health insurance to their employees who work 20 hours or more a week for four consecutive weeks. Employees must maintain the minimum of at least 20 hours a week to remain eligible. To date, Hawaii is the only state that has implemented an employer mandate. This is, in large part, due to the legal restrictions of the federal Employee Retirement Income Security Act (ERISA). ERISA was passed the same year as the Prepaid Health Care Act and Hawaii was allowed an exemption from ERISA. Hawaii has one of the highest rates of individuals covered under employer-sponsored insurance. After the Prepaid Health Care Act became law the uninsured rate in Hawaii dropped from 30 to 5 percent. However, since then it has risen to 10 percent.

The Act requires a fixed formula that requires employers to contribute 50 percent of the premium cost for single coverage, and the employee must contribute to the balance. The employee's share can not exceed 1.5 percent of his or her wages. Additionally, coverage benefits must be equal to those provided by the plan with the largest number of subscribers in Hawaii. Some employers including government services, approved seasonal employment, insurance agents and real estate salespersons paid solely by commission and sole proprietors with no employees are exempted from the Act's requirements.

Link to text of enacted legislation:
Chapter 393: 1-51

Additional Resources:
The Hawaii Uninsured Project