Health Care Reform FAQs

1. Does my company qualify for a Small or Large Business Health Plan?
2. Why do I see new taxes and fees on my HMAA monthly premium invoice?
3. What taxes and fees are HMAA required to collect and remit under the Affordable Care Act?
4. Is my company subject to the Employer Shared Responsibility (“Play or Play”) Provision?
5. Did HMAA apply the transitional policy to its groups?
6. How do I know if my health plan is in Grandfathered or Grandmothered status?
7. What impact will there be to my health insurance costs and benefits?
8. Do employers still need to comply with the Hawaii Prepaid Health Care Act?
9. Will Health Care Reform continue to be difficult?

1. Does my company qualify for a Small or Large Business Health Plan?

Calculate your group size to help determine whether your company qualifies for a small business or large business health plan.  Group size is determined by the number of full-time equivalent employees (FTEs) as defined in the Affordable Care Act. Companies with a common owner or are otherwise related are generally combined and treated as a single group, and their employees are combined for purpose of determining group size.

  • The Hawaii Insurance Commissioner has confirmed the State of Hawaii definitions are as follows:
    • Small Group: 1 to 50 FTEs
    • Large Group: 51 or more FTEs

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2. Why do I see new taxes and fees on my HMAA monthly premium invoice?

These fees and taxes are being imposed on all health plans, including HMAA, by the federal government to pay for Health Care Reform. Groups will see these fees and taxes added to their monthly premium invoices. While we are bound by law to comply with these taxes and fees, HMAA always strives to ensure you and your employees are getting the most value for your hard-earned premium dollars. Thus we remain focused on continuously bringing new health and wellness initiatives and other value-added services to our members.
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3. What taxes and fees are HMAA required to collect and remit under the Affordable Care Act?

HMAA is currently required to collect and remit the following taxes and fees created by the Affordable Care Act, which may or may not have an impact on your premium rates at this time, depending upon your group’s circumstances. Please contact your HMAA Account Manager or our Sales Support Department for more information on the specific amount or collection period applicable to your group.


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4. Is my company subject to the Employer Shared Responsibility (“Play or Play”) Provision?

The “Pay or Play” provision applies to Applicable Large Employers (ALEs) with an average of at least 50 full-time employees, including full-time equivalents (FTEs), working at least 30 hours per week on business days during the preceding calendar year. Essentially, ALEs may “Pay” a penalty if they do not “Play” by the rules of offering minimum essential coverage (MEC). With all of HMAA’s medical plans meeting or exceeding the MEC standard and Hawaii’s Prepaid Healthcare Act in effect, the Pay or Play provision has minimal impact on Hawaii employer health coverage, but it includes certain reporting requirements.

Beginning with the 2015 plan year, ALEs must report health coverage offered on an informational return to the IRS, as well as furnish coverage statements to applicable individuals. A tax penalty will be assessed to ALEs that fail to provide minimum essential coverage to 70% of their full-time employees and eligible dependents up to age 26. For the 2016 coverage year and beyond, the requirement increases to 95%.


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5. Did HMAA apply the transitional policy to its groups?

Under a transitional policy outlined by President Obama on November 14, 2013 and approved by the Hawaii Division of Insurance on November 15, 2013, health insurers are able to continue coverage that would otherwise be terminated, cancelled or modified as a result of the Affordable Care Act. On February 29, 2016, CMS announced an extension to policies renewed on or before October 1, 2017, so long as all transitional policies end by December 31, 2017. HMAA has chosen to provide this additional flexibility to our clients.

HMAA small businesses whose health plans are affected by the transitional policy (also called “grandmothered” health plans) have already been notified about their option of maintaining their current coverage and that they will not be considered out of compliance with the ACA.

  • This does not impact all HMAA clients. You are not affected by this transitional policy if your business:
    • Has 51 or more full-time equivalent employees;
    • Is currently enrolled in a grandfathered health plan; or
    • Obtained HMAA coverage after October 1, 2013.

If you are an HMAA group that is not affected by this transitional policy, you do not have to do anything at this time, and we will be contacting you prior to your next scheduled renewal.


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6. How do I know if my health plan is in Grandfathered or Grandmothered status?

  • Grandfathered status applies to health plans that were in effect on March 23, 2010 and did not conduct any action that would cause the plan to lose grandfathered status in accordance with Health Care Reform and Department of Labor regulations. You may also view our frequently asked questions regarding grandfathered health plans for more information.
  • Grandmothered status applies to the transitional renewal health plans that were in effect as of October 1, 2013 and will renew prior to October 2, 2016 in accordance with the Transitional Policy.
Although these plans are not required to fully comply with the essential health benefits mandate, HMAA has enhanced its coverage for preventive and wellness services in 2014 for these plans.  If at any time you determine that your health plan no longer qualifies for grandfathered or grandmothered status, please contact your HMAA Account Manager or our Sales Support Department so we can update our records with the correct classification status. Penalties may be imposed on employers and health plans that fail to adhere to grandfathering and grandmothering provisions.
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7. What impact will there be to my health insurance costs and benefits?

The impact to your health insurance costs and benefits, including out-of-pocket expenses and deductibles, will depend on your group’s business size and grandfathered status. For small businesses, it also depends on your employee demographics, including their ages. With the additional benefits and new federal fees and taxes mandated by the Affordable Care Act, your cost may increase, perhaps a great deal.

  • New mandated fees and taxes may increase your cost.
  • Plans with lower monthly costs may have increasingly high deductibles that can still make health care unaffordable for those who need it most.

For further information about the impact of ACA on your health plan benefits, please refer to the current version of your HMAA plan documents by obtaining them from your health plan administrator or through your Online for Members account.

All of HMAA’s health plans meet the minimum actuarial value and essential coverage requirements under ACA.


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8. Do employers still need to comply with the Hawaii Prepaid Health Care Act?

Yes, employers still need to comply with the Hawaii Prepaid Health Care Act, which requires employers to provide health coverage for employees who work 20 hours or more a week for four consecutive weeks. Employees cannot contribute more than 1.5% of their wages.

Employers are not responsible for providing coverage for employees who do not meet Prepaid’s minimum eligibility requirements.


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9. Will Health Care Reform continue to be difficult?

With more than 2,000 pages of legislation, 20,000 pages of regulations, and the new administration, much confusion remains about ACA. Contact HMAA and we can help take the mystery out of Health Care Reform.
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