Why Obamacare's Employer Mandate Will Have Little Effect on Hawaii Business Owners

As a business owner, you may have heard the buzz about Obamacare’s “employer mandate.” Maybe you’re still wondering what it is and whether it applies to you. The short answer is that most Hawaii business owners won't have to worry about the Affordable Care Act's employer mandate, because state law already has you covered.

What Is Obamacare's Employer Mandate?

Soon, the federal Affordable Care Act (ACA) will require businesses employing 50 or more full-time-equivalent (FTE) workers to offer insurance coverage or face a tax penalty. This law will apply to businesses in which even one employee would qualify for cost-saving health insurance subsidies through HealthCare.gov, the health insurance marketplace for Hawaii.

You can learn more about the employer mandate here.

Why Obamacare's Employer Mandate Won't Affect Most Hawaii Business Owners

The new law is likely to have little effect on owners of large businesses in Hawaii, because existing state law includes a mandate that is much stricter than the ACA's. The Hawaii Prepaid Health Care Act (PHCA), passed in 1974, requires employers with even one employee to provide health coverage to those who work at least 20 hours per week.

In addition, coverage offered under state law must be more affordable than the minimum standards established by the ACA. Under Obamacare, employers must provide coverage that costs no more than 9.5% of an employee's household income. Under Hawaii's law, the employee's maximum contribution is much lower, just 1.5%.

For general information about the PHCA, see the website of the Hawaii Department of Labor and Industrial Relations (DLIR).

If you have questions about how to comply with the PCHA, or how the PHCA relates to Obamacare, call the DLIR at (808) 587-8776.