ACA Small-Business Health Options Program (SHOP) – Waiver Approved on 12/30/2016

On December 30, 2016, the U.S. Department of Health and Human Services (HHS) and U.S. Department of Treasury announced that it approved the State of Hawaii’s application for a State Innovation Waiver under section 1332 of the Affordable Care Act (ACA) [link]. This approval is effective for January 1, 2017 through December 31, 2021. Hawaii will need to apply to extend the waiver beyond December 31, 2021.

The State of Hawaii has been working on the 1332 waiver application since 2014, when the Legislature created the State Innovation Waiver Task Force (Act 159, SLH 2014). Governor Ige submitted the waiver application to HHS in June 2016.

In the application, Hawaii proposed to waive certain ACA provisions related to the ACA Small-Business Health Options Program (SHOP) on the basis of our unique Prepaid Health Care Act (Prepaid). Under this waiver, the ACA SHOP is not be required in Hawaii and the ACA SHOP tax credits are replaced by the State’s Prepaid Health Care Premium Supplementation Program. Accordingly, the U.S. Department of Treasury will be providing funding to the State’s Premium Supplementation Fund based on the amount of small business tax credits that would have been provided to small employers under ACA. This will provide financial assistance to eligible small businesses providing health insurance coverage to employees, as intended under ACA SHOP. The Premium Supplementation form is here.

Small businesses that do not have employees on payroll (e.g., Independent Contractors) or have only family member employees may be able to purchase health insurance through the Individual and Family program. For more information, visit healthcare.gov.

Employees with questions about their health insurance coverage should talk with their employers about how their health insurance is being provided (i.e., SHOP or Prepaid Health).

For more information or assistance, please contact us:

  • Phone: (808) 586-8835 (Oahu) | 1-844-308-6307 (toll free) | TDD/TTY: Dial 711, then ask for (808) 586-8866
  • Email: dlir.director@hawaii.gov
  • Mail: 830 Punchbowl Street, Room 321, Honolulu, Hawaii  96813

FREQUENTLY ASKED QUESTIONS

Q: My business was enrolled in a SHOP QHP in 2016. Can I apply for the tax credit?
A: Businesses enrolled in 2016 SHOP QHPs may apply for the SHOP tax credit for the full enrollment period. For example, if your business enrolled in a 2016 SHOP QHP in March 2016 for a 12 month term (through February 2017), you may claim the tax credit for the full enrollment period, subject to the 2-time maximum and all other requirements.

Q: How does my business apply for Premium Supplementation?
A: The eligibility criteria for Premium Supplementation are different from the ACA SHOP tax credit. Information about Premium Supplementation is available at this link. The form is here.

Q: What carriers offer ACA Compliant Group Plans? 
A: The following carriers offer ACA Compliant Medical Plans: Hawaii Medical Assurance Association (HMAA), Hawaii Medical Service Association (HMSA), Kaiser Foundation Health Plan, UnitedHealthcare Insurance Company, and University Health Alliance.
The following carriers offer ACA Compliant Stand-Alone Dental Plans: Best Life and Health Insurance Company, Hawaii Dental Service, and Hawaii Medical Service Association (HMSA).

Q: Do I still need to issue Form 1095s to employees? 
A: Yes. The waiver only addresses SHOP.

Q: I need information about ACA coverage for Individuals/Families. Who do I contact?
A: All individual and family ACA plans are handled by the ACA Federal Exchange (www.healthcare.gov).