Hawaii Legislative Update: HSAs and HCRs

Health Savings Accounts, like so much else about our health insurance landscape, would look different in Hawaii.

Essentially, HSAs don’t exist here where the Prepaid Health Care Act governs coverage; however, House Bill 407 could change that.

Unlike federal rules that allow high deductible health plans for employees if paired with HSAs that may be funded by the employee, HSAs in Hawaii would have to be funded by the employer.  As outlined in HB 407, HD3 insurers/mutual benefit societies may offer high deductible plans in conjunction with HSAs in a combination that complies with the Prepaid Health Care Act.

The insurer/MBS would have to ensure that a regular plan option is also made available to employees.  The language specifying that insurers/MBS may offer these plans as opposed to saying that employers may purchase them relates to avoiding ERISA complications.

Some concerns raised in testimony include the possible risk pool shift if healthy employees take the high deductible/HSA route while those with health problems stick with a traditional plan, plus it isn’t clear that an employer would have to add funds to the HSA annually.

HB407 could also pose a threat to Hawaii’s health coverage status quo.  If the high deductible/HSA combo turned out to be really popular it could become the “prevalent plan” for employer coverage.  Under the Prepaid Health Care Act, the prevalent plan defines the standard for employer-sponsored coverage.

The Dept. of Labor & Industrial Relations, which oversees Prepaid, says high deductible/HSA offerings are in the class of plans that, if chosen, would require that the employer pay for not just employee coverage but for at least half the cost of dependent coverage as well, an option that isn’t all that popular.

Keeping an eye on resolutions, which don’t have the force of law but often foreshadow decisions about current and future bills, some that popped up by the March 10th deadline include:

  • Requesting the auditor to assess the social and financial effects of requiring health insurers, mutual benefit societies, and health maintenance organizations to provide coverage for medically necessary cognitive rehabilitation therapy for survivors of traumatic brain injury” (HCR165/SCR105). The bills that would have required 20 years of coverage for such services died this year but watch for them again next year.
  • Urging the department of labor and industrial relations to prepare a checklist for employers wishing to offer a high deductible health plan for use with a health savings account to facilitate the submission and approval process for employers seeking such packages” (HCR174/SCR80). HB407, outlined above, is still moving but may be seen as not ready for implementation.
  • A couple of bills that didn’t get out of the gate this year – requiring insurers to cover Native Hawaiian culture-based activities such as hula or paddling and establishing a sugar-sweetened beverage surcharge – turned into resolutions asking for studies (HCR93/SCR149 and HCR128/SCR155, respectively).
  • HCR164/SCR133 requests that the Dept. of Health convene a group to study “Medication Synchronization” and recommend legislation for 2018.