Starting in 2017, states can opt out of the federal Affordable Care Act (ACA) and implement their own health care systems, but they must match or exceed ACA standards. Hawaii has now jumped into the opt-out, do-better fray, saying its own standards already exceed those of the federal statute.
Specifically, the Aloha State wants to set up its own Small Business Health Options Program (SHOP), filing the first-ever ACA Section 1332 opt-out petition with the Centers for Medicare and Medicaid Services (CMS), the administrative body for the national health ordinance.
The ACA requires employers with 50 or more full-time employees (those who work at least 30 hours a week) to provide health insurance, whose cost to the employees must not exceed 9.5 percent of their income.
In contrast, the Hawaii Prepaid Health Care Act of 1974 requires state employers with at least one full-time employee to provide health insurance whose employee portion does not exceed 1.5 percent of income.
When the Obamacare insurance exchanges opened in 2014, Hawaii tried to establish its own exchange but found it too costly and difficult to operate, so it ended up on healthcare.gov, the federal site. Now it is asking the federal government to forward any SHOP-related tax rebates due Hawaii employers so it can run its own SHOP program, using the funds to lower premiums for qualifying employers.