HONOLULU (AP) — State lawmakers approved legislation that would allow employers to offer employees a high-deductible health insurance plan that’s paired with a savings account.
High-deductible plans have not been allowed in Hawaii’s insurance market, and some say the bill approved by a Senate committee last week would create health insurance plans that are financially risky.
The legislation was introduced on behalf of University Health Alliance, one of the state’s main health insurance companies.
“We think it can be approved currently, but rather than trying to dispute that, we thought if we have a law it is clear,” said the alliance’s CEO, Howard Lee.
Under the bill, individuals covered under high-deductible plans would have to pay at least $1,300 in medical costs annually before coverage kicks in.
They also could end up paying $6,550 in out-of-pocket expenses annually — a cap set by the federal Affordable Care Act.
Employees who also are covering a spouse or children under a family plan would have to pay at least $2,600 in medical expenses annually before coverage begins. Their annual out-of-pocket medical costs could soar as high as $13,100.
The plans come with a health savings account that is expected to cover the deductible and any other medical costs throughout the year, although there is no language in the bill that requires employers to contribute to the savings accounts.
Lee said UHA will work to encourage employers to provide substantial contributions to the health savings accounts.
“What we are proposing here is not like the mainland high deductible,” he said.
“What we are proposing is focusing more on a savings mechanism — that the employer puts in money for the employee so that they could continue to build reserves for security, peace of mind.”
The legislation has been supported by some Hawaii employers, including Alexander &Baldwin and JTB Hawaii. But it faced opposition from local unions, such as ILWU 142 and the Hawaii State AFL-CIO.
Maui Democratic Sen. Rosalyn Baker said she was willing to give the bill a try, while acknowledging it might “be a very beneficial opportunity” for some employees and “a disaster” for others.
“This is something new,” Baker said. “We want to see if it works; we want to see what the impact is.”
The proposal is expected to move forward to conference committee, where it will be reviewed by members of the House and Senate.
