Alternative Options for Employees Losing Healthcare Coverage

We are lucky to live in a state where there are many options that may help workers who are losing healthcare coverage due to job loss or a reduction in hours. Here are some free or low-cost options for health insurance in Hawaii that you may present to your employees.

Family Coverage

One of the simplest steps your employee could take is looking for coverage that may be available within their family. If the employee is under the age of 26, they might be able to get coverage through their parents’ health plan. Alternatively, if the employee is married, they may be able to enroll in coverage through their spouse’s plan, if available. Losing health insurance coverage is a qualifying event for enrollment in their parents’ or spouse’s plan.

Medicaid (QUEST)

Medicaid, known in Hawaii as QUEST, is a federal- and state-funded insurance program for low-income adults, children, pregnant women, and seniors. Since the Affordable Care Act took effect in 2010, the number of people who qualify for Medicaid increased dramatically. Even if your employee didn’t qualify in the past, or doesn’t believe they will meet the eligibility criteria, there’s a good chance they could qualify for free or low-cost coverage if their household income has decreased. In fact, almost 20% of the Hawaii population received QUEST in 2019.

Medicare

Medicare is an insurance program administered by the Social Security Administration for people 65 years old or older, those receiving Social Security disability benefits, or individuals with a qualifying disease. People may be eligible for both Medicare and Medicaid (QUEST). Monthly costs depend on the plan.

Health Insurance Marketplace

The Health Insurance Marketplace helps people compare prices and enroll in affordable health insurance. By applying for coverage through the marketplace, employees will be notified if they qualify for premium tax credits, cost savings, or Medicaid. Losing health insurance qualifies employees for a special enrollment period. The marketplace can also be used by businesses to shop for coverage for their employees.

COBRA

Under COBRA, employees and their dependents have a right to temporarily continue group health insurance coverage after job loss or a reduction in hours resulting in loss of eligibility. COBRA is only available if your businesses group health plan remains open with at least one active employee.

While COBRA can be a great option for individuals currently undergoing medical treatment, the employer can, and typically does, require the employee to pay 100 percent of the premium costs, making this a less affordable option for employees.

To avoid potential penalties, employers with more than 20 employees are encouraged to familiarize themselves with COBRA compliance rules.

Community resources

Hawaii has a vast network of community health centers. These centers operate on a not-for-profit basis, meaning they’re providing health services at very low or no cost, depending on a patients’ ability to pay.

Additionally, there are hundreds of nonprofit organizations that offer health programs to the Hawaii community.

• Download: Printable handout outlining options for securing health insurance after job loss – Hawaii Individual Health Insurance Resource (PDF)

Disclaimer: This material is provided for informational purposes only. It is not intended to constitute legal advice, and readers should consult with their advisor or counsel before taking any actions based on the information contained within this material.