Short-term health plans in Hawaii
- A 2018 state law prohibits the purchase of a short-term health insurance in Hawaii by anyone eligible to buy a plan in the state’s exchange during the previous calendar year.
- The law limits short-term plan duration to no more than 90 days.
- The law effectively eliminated the market for short-term health insurance in Hawaii.
- No insurers offer short-term plans in Hawaii.
Hawaii’s short-term health insurance regulations
Hawaii enacted HB1520 (Act 192) in July 2018. The legislation prohibits the sale or renewal of a short-term plan to anyone who was eligible to purchase a plan in the exchange during the previous calendar year, either during open enrollment or during a special enrollment period.
The legislation also limits short-term health insurance in Hawaii to no more than 90 days in duration, and took effect immediately, in July 2018.
The legislation prohibits renewal and/or re-enrollment for anyone who was eligible to purchase a plan in the exchange during the previous year, and defines “renew or reenroll” as providing coverage (under a new plan or the renewal of an existing plan) to anyone who has had coverage under a short-term plan within the previous calendar year. So a person was eligible to purchase a plan in the exchange cannot buy a short-term plan for the first time, and also cannot renew a short-term plan or purchase a subsequent short-term plan if they already have one.
Because HB1520 bans the sale or renewal of short-term plans to anyone who was eligible to purchase an ACA-compliant plan in the exchange during the previous calendar year, it essentially eliminates the market for short-term plans in Hawaii — because virtually everyone is eligible to purchase coverage in the exchange in any given calendar year.
The only people who aren’t eligible to purchase a plan in the exchange are undocumented immigrants, incarcerated individuals, and people who are eligible for premium-free Medicare Part A.
And although short-term health insurance in Hawaii used to be available for sale, that is no longer the case. Insurers that previously offered short-term plans in the state have stopped doing so, likely because hardly anyone was eligible to purchase the plans.
Short-term plans duration in Hawaii
Until October 2, 2018, federal regulations limited short-term plans to three months in duration, and prohibited renewal. The Trump Administration relaxed those rules, but only in states that allow it. Since Hawaii passed legislation in 2018 to limit short-term plans to 90 days (and to sharply limit eligibility), the new federal rules (allowing for longer short-term plans) do not apply in Hawaii.
Which insurers offer short-term plans in Hawaii?
As of early October 2018, National General was still offering short-term health insurance in Hawaii. But by late October, there were no longer any short-term plans for sale in the state, and that continues to be the case as of 2020. Several insurers are offering fixed indemnity plans, but those are not the same thing as short-term health insurance.
How can I get affordable health insurance in Hawaii?
Short-term health insurance is not an option in Hawaii, but there are other ways of obtaining affordable health insurance, including employer-sponsored coverage, Medicaid, and the Hawaii marketplace/exchange.
Hawaii has the nation’s strongest employee protections in terms of employer-sponsored health coverage: Under the state’s Prepaid Health Care Act, enacted in the 1970s, employers have to provide health insurance to employees who work at least 20 hours per week. The rule applies to businesses of any size, and the plan can’t cost the employee more than 1.5 percent of the employee’s wages for self-only coverage.
By comparison, the Affordable Care Act’s employer mandate offers far fewer protections: It only applies to businesses with at least 50 employees, it only requires them to provide coverage for workers who are employed at least 30 hours per week, and it requires the employee-only coverage to cost no more than 9.78 percent of the employee’s household income (in 2020; that percentage changes from one year to the next).
Hawaii also expanded Medicaid under the Affordable Care Act, which means most adults up to age 64 with household income up to 138 percent of the poverty level can qualify for Medicaid, which has no monthly premiums and low out-of-pocket medical costs. In 2020, the income cap for eligibility under expanded Medicaid amounts to $20,258 for a single adult in Hawaii. This is higher than the limits in the continental US, because the federal government has established higher poverty levels for Hawaii.
Hawaii’s marketplace/exchange offers private ACA-compliant major medical plans from HMSA and Kaiser, with financial assistance available based on income. The annual open enrollment period (November 1 – December 15) allows residents an opportunity to sign up for coverage, but there are also several qualifying life events that will trigger a special enrollment period that would allow you to enroll in a plan outside of the open enrollment period.
Premium subsidies are based on household income relative to the poverty level. So the income range for premium subsidy eligibility is higher in Hawaii too, given the higher poverty level. A family of four can qualify for premium subsidies for 2021 health coverage in Hawaii’s marketplace with an income of $120,520. For a single person, premium subsidies are available for 2021 coverage with an income of $58,720 (premium subsidy eligibility is based on the poverty guidelines for the year prior to the coverage effective date).
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.