HOUSE OF REPRESENTATIVES	H.B. NO.	1546
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII

A BILL FOR AN ACT

relating to health insurance.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that access to preventive services, telehealth, and urgent care improves health outcomes and helps in reducing long-term health care costs. Portable coverage options, including those that allow for employer contributions, support workforce stability without imposing additional regulatory burdens for employers. Recent changes to Medicaid eligibility and redetermination processes made at the federal level will cause a significant number of residents of the State to lose their Medicaid health insurance coverage. The legislature further finds that many of those who will lose Medicaid coverage lack access to employer-sponsored health insurance or other health insurance options during periods of transition between health insurance plans. Furthermore, commercial health insurance plans are often cost-prohibitive for individuals who experience temporary or intermittent gaps in health insurance coverage.

The legislature also finds that, due to federal rule changes effective on January 1, 2026, low-premium bronze and catastrophic health insurance plans, when paired with health savings accounts, may offer an affordable and flexible coverage option for individuals who no longer qualify for Medicaid but cannot afford comprehensive health plans. The legislature additionally finds that targeted, time-limited interventions can help to prevent disruptions in care while preserving the protections of the Prepaid Health Care Act for full-time workers.

Accordingly, the purpose of this Act is to:

(1) Establish a three-year health coverage continuity pilot program within the department of human services, in consultation with the department of commerce and consumer affairs, to assist individuals who have lost Medicaid health insurance coverage and lack access to other health insurance options;

(2) Authorize the department of human services to contract with a nonprofit health insurer or community-based organization to operate the pilot program, under certain circumstances; and

(3) Authorize the department of human services to:

(A) Issue premium subsidies or vouchers; and

(B) Accept employer contributions, under certain circumstances.

SECTION 2. (a) There shall be established a three-year health coverage continuity pilot program to be administered by the department of human services in consultation with the department of commerce and consumer affairs. The purpose of the pilot program shall be to provide health insurance coverage to individuals who have lost medicaid coverage and do not qualify for employer-sponsored insurance or federal premium subsidies under the Affordable Care Act or any successor federal program to mirror 2026 federal rules allowing health savings accounts to pair with bronze level or catastrophic health insurance plans.

(b) The department shall:

(1) Target individuals who have lost medicaid coverage and do not qualify for employer-sponsored health insurance or federal premium subsidies under the Affordable Care Act or any successor federal program, including but not limited to:

(A) Seasonal or agricultural workers;

(B) Independent contractors and freelancers;

(C) Underemployed adults; and

(D) Community college or university students without other health insurance coverage;

(2) Establish eligibility criteria and an application process for enrollment in the pilot program; and

(3) Provide low premium bronze level or catastrophic health insurance plans approved by the insurance commissioner; provided that the health plans:

(A) Qualify as high deductible health plans under federal law;

(B) Allow an individual to make tax-deductible contributions to a health savings account in accordance with federal law; and

(C) Provide coverage for preventive care health visits, urgent care services, telehealth services, and generic prescription drugs, including essential health benefits as defined under federal or state law.

(c) Direct payment agreements for routine primary care services between a patient and a licensed provider:

(1) Shall not be considered insurance; and

(2) May be used in combination with coverage offered under this program, to the extent permitted under federal health savings account rules.

(d) The department may contract with a nonprofit health insurer or community-based organization to administer or operate the pilot program; provided that the department shall allow the operator to access state-backed reinsurance or risk stabilization support during the pilot program. The department shall promote collaboration between the operator of the pilot program and local health systems, federally qualified health centers, and safety-net providers in the State to implement the pilot program.

(e) The department may:

(1) Issue premium subsidies or vouchers to eligible individuals enrolled in the pilot program; and

(2) Accept employer contributions for eligible individuals enrolled in the pilot program;

provided that any subsidy, voucher, or contribution shall be portable and shall follow the individual without imposing compliance or administrative obligations on the State or an employer.

(f) The department shall use funding from general appropriations for the implementation of the pilot program. The department shall apply for any federal subsidies, matching funds, or waivers, including but not limited to waivers under section 1332 of the Affordable Care Act, and section 1115 of the Social Security Act of 1935, as applicable, to carry out the pilot program.

(g) The department shall adopt rules pursuant to chapter 91 necessary for the purposes of the pilot program.

(h) The department shall submit a report to the legislature no later than twenty days prior to the convening of the 2027, 2028, and 2029 regular sessions that includes the following:

(1) Enrollment data;

(2) Health outcomes;

(3) Fiscal impact;

(4) Program sustainability; and

(5) Proposed legislation.

(i) The pilot program shall cease to exist on June 30, 2029.

(j) For the purpose of this Act:

"Affordable Care Act" means the federal Patient Protection and Affordable Care Act, public law 111-148, as amended.

"Department" means the department of human services.

SECTION 3. This Act shall take effect upon its approval and shall be repealed on June 30, 2029.

INTRODUCED BY:

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Report Title:

DHS; DCCA; Health Coverage Continuity Pilot Program; Bronze Level; Catastrophic Plan; Subsidies; Waivers; Vouchers; Employer Contributions; Portability; Reports

Description:

Establishes a three-year Health Coverage Continuity Pilot Program within the Department of Human Services, in consultation with the Department of Commerce and Consumer Affairs, to assist individuals who have lost Medicaid health insurance coverage and lack access to other health insurance options. Authorizes the Department of Human Services to contract with a nonprofit health insurer or community-based organization to operate the Pilot Program; provided that the Department shall allow the operator to access state-backed reinsurance or risk stabilization support for the operator of the Pilot Program. Authorizes the Department of Human Services to: (1) Issue premium subsidies or vouchers; and (2) Accept employer contributions; provided that the benefit shall be portable and follow the individual without imposing compliance or administrative obligations on the State or an employer. Requires reports to the Legislature. Repeals 6/30/2029.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.