November 09, 2015

A. Types of Exchanges

Three types of “Exchanges” or “Marketplaces” were allowed by the Affordable Care Act, and all states had to choose one of these:
1. State-based Marketplace, in which the state assumes all functions (~16 states).
2. State partnership Marketplace, in which the state shares operational functions with the federal government.
3. Federally facilitated Marketplace, in which the federal Department of Health and Human Services assumes all functions.

A fourth type of Exchange developed later to accommodate States. It is a combination of 1 and 3 above: a State-based SHOP (for small employers) with a federally facilitated individual Marketplace.

B. Hawaiʻi is a State-based Marketplace

Hawaii’s legislature choose # 1, the State-based Marketplace and it is called the Hawaiʻi Health Connector or the Connector. Hawaii Connector, established by Hawaii Act 205 in 2011, is a private, non-profit corporation and is recognized as a quasi-governmental agency. The statutes regulating the Connector can be found at Chapter 435H titled “Hawaii Health Insurance Exchange.”

Hawaiʻi Health Connector also known as “the Connector”

A. What the Connector Offers

One of the goals of the ACA is to provide affordable health coverage to all Americans. In Hawaii, there are people without healthcare coverage but Hawaii does have one of the lowest uninsured rates. Massachusetts has the lowest uninsured rate due to an individual state mandate that everyone have healthcare coverage. The Connector helps individuals and small businesses find and purchase health
insurance to fit their budget. In particular, the Connector provides:

- Healthcare coverage

o Individuals
o Employers up to 50 employees through the Small Business Health
Options Program known as “SHOP”

- Affordability through tax credits or incentives

o Tax credits or cost sharing reductions for individuals; see calculator at: www.Hawaiihealthconnector.com/help-center/national-subsidycalculator-kaiser-family-foundation/
o Small business tax credit for businesses with fewer than 25 employees: www.Hawaiihealthconnector.com/help-center/small-business-healthtax-credit-calculator/

- Transparency and comparability of coverage by ranking plans

o Plans designated as platinum, gold, silver, or bronze
o Each plan level is based on an actuarial value and represents a the percentage of medical expenses that the health plan covers for an
average population:

Plan Level:  % expense paid by the insurer

• Platinum 90%
• Gold 80%
• Silver 70%
• Bronze 60%

Important Note: The Hawaiʻi Prepaid Health Care Act requires that applicable employers offer their employees a plan designated by the Hawaii Department of Labor and Industrial Relations (“DLIR”) as either a “7a” or “7b” plan. The platinum and gold levels meet the 7a or 7b DLIR plan designations. Also, see http://labor.hawaii.gov/wp-content/uploads/2013/12/ACA-PHCA-PR20131211.pdf from the DLIR.

o These plans must include coverage for the essential health benefits, which include the following 10 benefit categories:
1. Ambulatory patient services
2. Emergency services
3. Hospitalization
4. Maternity and newborn care
5. Mental health and substance use disorder services, including
behavioral health treatment
6. Prescription drugs
7. Rehabilitative and habilitative services and devices
8. Laboratory services
9. Preventive and wellness services and chronic disease management
10. Pediatric services, including oral and vision care

o Plans approved by the Hawai‘i Insurance Commissioner to be offered on and off the Connector are available: http://cca.Hawaii.gov/ins/news-release-state-releases-2014-aca-premiumscomparison-sheet.

- Assistance to applicants

o Through a service center, phone calls, e-mails, the Connector website, and outreach programs, the Connector assists applicants.

o With the help of the Connector, applicants can explore all health plan options (benefits and pricing), including eligibility for government programs, such as Medicaid.

- Hardship exemption

o The ACA’s individual mandate requires a fee be paid (i.e., shared responsibility payment) if an individual does not have health coverage that qualified as “minimum essential coverage.” But note that there has been a two year delay in fee payments for individuals with policies that do not meet minimum essential coverage (sometimes referred to as “grandmothered” plans).

o The Connector can provide a hardship exemption to individuals that have experienced certain types of “hardships” which kept them from becoming insured. If granted the exemption, the individual does not pay a fee for not being insured. Examples of hardships include
homelessness, facing foreclosure, eviction within the past 6 months, etc. See this site for a list: www.healthcare.gov/exemptions/.

- Catastrophic plans

o Lower cost plans with a level coverage lower than bronze plans.

o Only individuals who are not yet 30 years of age, or individuals who are exempt from the ACA may enroll in a catastrophic plan. Enrollees in these plans do not qualify for any tax credits.

B. Minimum Essential Coverage

Minimum essential coverage includes the following:

• Employer-sponsored coverage, including self-insured plans, COBRA coverage and retiree coverage
• Coverage purchased in the individual market, including a qualified health plan offered by the Health Insurance Marketplace
• Medicare Part A coverage and Medicare Advantage plans
• Most Medicaid coverage
• CHIP (Children's Health Insurance Program) coverage
• Certain types of veterans health coverage administered by the Veterans Administration
• Most types of TRICARE coverage under chapter 55 of title 10 of the United States Code
• Coverage provided to Peace Corps volunteers
• Coverage under the Nonappropriated Fund Health Benefit Program
• Refugee Medical Assistance supported by the Administration for Children and Families
• Self-funded health coverage offered to students by universities for plan or policy years that begin on or before Dec. 31, 2014 (for later plan or policy years, sponsors of these programs may apply to HHS to be recognized as minimum essential coverage)
• State high risk pools for plan or policy years that begin on or before Dec. 31, 2014 (for later plan or policy years, sponsors of these program may apply to HHS to be recognized as minimum essential coverage)
• Other coverage recognized by the Secretary of HHS as minimum essential coverage