Frequently asked questions – PHC

Workers’ Compensation ι Prepaid Health Care ι Temporary Disability Insurance

 

Prepaid Health Care (PHC)

Employer’s section

Who is required to provide PHC coverage?
Who is excluded from PHC coverage?
How does an employer provide PHC coverage?
What is the Premium Supplementation Fund and who may benefit from it?

Employeee’s section

Who is eligible for PHC benefits?
When does my health care coverage begin?
If I have two jobs, which employer is to provide PHC coverage?
If I already have health coverage elsewhere, do I have to be covered again by my employer’s plan?
If I cannot work due to a disability, is my employer required to continue my health insurance?
How much can my employer charge for my health insurance?

Health care contractor’s section

Who is a health care contractor?

Additional questions

What if my employer is from outside of Hawaii and I only work in Hawaii part of the time?
What if my business is based in another state and my employees only work in Hawaii on a limited basis?
What if my employee works for other employer(s)—am I required to provide health insurance coverage?
What if my employer does not offer health care and I believe I am eligible for coverage by my employer?

 

Who is required to provide PHC coverage?

Other than those excluded (refer to section 393-5 of the law for exclusions), all employers with one or more employees, whether full-time or part-time, permanent or temporary, are required to provide PHC coverage to their eligible employees in Hawaii.

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Who is excluded from PHC coverage?

Some workers are excluded from health care coverage (refer to Section 393-5 of the law for exclusions) such as:

  • individuals who work less than twenty hours per week;
  • Federal, State, and County employees;
  • agricultural seasonal workers;
  • insurance or real estate salespersons paid solely by commission;
  • individuals working for son, daughter, or spouse; and
  • children under age 21 working for father or mother.

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How does an employer provide PHC coverage?

An employer may obtain health care coverage by:

  • purchasing an approved health care plan from a health care contractor or a Hawaii licensed insurance carrier;
  • adopting an approved self-insured health care plan (Form HC-4, Form HC-61); or
  • purchasing an insured plan of its choice. The employer selects the health care contractor and the plan type.

As a self-insurer, the employer must show proof of financial solvency and ability to pay benefits by furnishing this Division with the latest audited financial statements for review. Following the initial approval, the audited financial statements must be filed annually for continued approval of the employer’s self-insured plan.

All health care plans must be approved by the Department of Labor and Industrial Relations as meeting prescribed minimum standards. Such determination is made by the Director under the advisement of a seven-member Prepaid Health Care Advisory Council consisting of representatives from the medical and public health professions, from consumer interests, and from the prepaid health care protection industry.

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What is the Premium Supplementation Fund and who may benefit from it?

The Prepaid Health Care (PHC) Premium Supplementation Fund was established in 1974 by general fund appropriation and used to defray the cost of providing health care benefits for employers with less than eight employees entitled to and covered under the PHC Act. To qualify for premium supplementation, the employer must meet the criteria as outlined in the Form HC-6a or section 393-45 of the law and file a claim (Form HC-6) with the Audit Section of this Division within two years after the close of the employer applicant’s taxable year.

The Fund may also reimburse health care expenses to employees of bankrupt and noncompliant employers. Benefits paid from the Fund shall be recovered from those defaulting employers.

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Who is eligible for PHC benefits?

If you work twenty hours or more per week for four consecutive weeks and earn a monthly wage of at least 86.67 times the current Hawaii minimum hourly wage ($7.25 effective January 1, 2007), you are deemed eligible. You must be provided with health insurance at the earliest enrollment date of your employer’s health care contractor.

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When does my health care coverage begin?

Coverage commences after you have worked four consecutive weeks, at the earliest time the health care contractor can provide coverage. Usually, it is the first of the month following the month during which you met the eligibility criteria.

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If I have two jobs, which employer is to provide PHC coverage?

If you work concurrently for two or more employers, you are required to designate the principal and secondary employer and file notification (Form HC-5) with your employers who, in turn, will file the notification with this Division. The principal employer shall be the employer who pays you the most wages; only in cases where the employer who does not pay the most wages employs you for at least 35 hours per week do you determine which of the employers shall be the principal employer. The designated principal employer is required to provide coverage pursuant to the law (393-6, 393-16). Your determination of principal employer is binding for one year or until change of employment occurs. Whenever you elect to make a change with respect to the status of each, notification (Form HC-5) must be filed.

Your employer is prohibited from coercing, interfering, or influencing you in making a determination of principal employer.

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If I already have health coverage elsewhere, do I have to be covered again by my employer’s plan?

You can elect to be exempt from coverage under your employer’s health care plan if:

  • You are covered by a federally established health insurance or prepaid health care plan, such as Medicare, Medicaid or medical care benefits provided for military dependents and military retirees and their dependents;
  • You are covered as a dependent under a qualified health care plan;
  • You are a recipient of public assistance or covered by a State-Legislated health care plan governing medical assistance; or
  • You are a follower of a religious group that depends upon prayer or other spiritual means for healing.

To claim an exemption, you must complete and submit the Employee Notification to Employer (Form HC-5) to your employer. The exemption notification is binding for one year and must be renewed every December 31.

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If I cannot work due to a disability, is my employer required to continue my health insurance?

In the event you are disabled and unable to work, your employer is obligated to enable you to continue health care coverage by continuing the employer’s share of the premium costs for three additional months following the month during which you became disabled, or for the period for which your employer has undertaken payment of your regular wages, whichever is longer. You must maintain your portion of the premium payments; otherwise, coverage may be terminated.

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How much can my employer charge for my health insurance?

Your employer may elect to pay the entire premium amount or share the cost with you. For single coverage, your employer must pay at least one-half the premium cost; however, your contribution cannot exceed 1.5% of your monthly gross wages. In the event your allowable share constitutes less than one-half of the premiums, your employer is liable for the entire remaining portion. Your employer is permitted to withhold your contribution from your wages each pay period. You cannot agree to pay a greater share from wages except for the purpose of paying for the added cost of providing prepaid health care benefits for your dependents under the same plan.

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Who is a health care contractor?

A prepaid health care contractor may fall in one of three groups:

  • any medical group or organization which provides health care benefits under a prepaid health care plan;
  • any nonprofit organization which defrays or reimburses in whole or in part the expenses of health care under a prepaid health care plan; or
  • any insurer who defrays or reimburses in whole or in part the expenses of health care under a prepaid health care plan.

For required health benefits that the prepaid health care plans must offer to meet standards as prescribed by law, please call the Plans Acceptance Branch.

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What if my employer is from outside of Hawaii and I only work in Hawaii part of the time?

Follow up questions to DLIR should be referred to Ed Wang (808) 587-8776.

 

What if my business is based in another state and my employees only work in Hawaii on a limited basis?

Follow up questions to DLIR should be referred to Ed Wang (808) 587-8776.

 

What if my employee works for other employer(s)—am I required to provide health insurance coverage?

Follow up questions to DLIR should be referred to Ed Wang (808) 587-8776.

 

What if my employer does not offer health care and I believe I am eligible for coverage by my employer?

Follow up questions to DLIR should be referred to Ed Wang (808) 587-8776.

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