Enables sole proprietors of businesses to enroll in group health insurance programs.

A BILL FOR AN ACT

SECTION 1. Section 431:2-201.5, Hawaii Revised Statutes, is amended to read as follows:

"§431:2-201.5 Conformity to federal law. (a) The provisions of Title 42 United States Code section 300gg, et seq., as they relate to group and individual health insurance shall apply to title 24, except:

(b) The following definitions shall be used when applying Title 42 United States Code section 300gg, et seq.:

"Employee" means an employee who works on a full-time basis or a part-time employee with a normal workweek of twenty hours or more.

"Group health issuer" means all persons offering health insurance coverage to any group or association, but shall not include those persons offering benefits exempted from Title I of the Health Insurance Portability and Accountability Act of 1996, P.L. 104-191 under sections 732(c) and 733(c) of Title I of the Employee Retirement Income Security Act of 1974 and sections 2747 and 2791(c) of the Public Health Service Act.

"Small employer" means an employer who employs [between one and] no more than fifty employees[.], including sole proprietors or self employed individuals with no employees, without regard to the nature of the legal entity of the employer and without regard to whether the employer is required to provide health care coverage pursuant to chapter 393 or whether the employer is required to obtain worker's compensation insurance, temporary disability insurance, or unemployment insurance.

(c) All group health issuers shall offer all small group health plans to all small employers whose employees live, work, or reside in the group health issuer's service areas; provided that the commissioner may exempt a group health issuer if the commissioner determines that the group health issuer does not have the capacity to deliver services adequately to enrollees of additional groups given its obligation to existing employer groups.

(d) A group health issuer shall be prohibited from imposing any preexisting condition exclusion.

(e) A group health insurer shall be prohibited from imposing eligibility requirements based upon:

(f) A group health insurer shall be prohibited from requiring that the employer verify eligibility to participate in a group health insurance program by requiring an employer to provide an employer identification number, tax identification number, or tax documents.

(g) A group health insurer shall be prohibited from imposing participation requirements on small employers who employ less than five employees.

[(e)] (h) The commissioner may adopt rules to implement, clarify, or conform title 24 to Title 42 United States Code section 300gg, et seq.

[(f)] (i) The adoption of the Health Insurance Portability and Accountability Act of 1996, P.L. 104-191, for the purposes of title 24 is not an adoption for any purposes for income taxes under chapter 235.

[(g)] (j) The State shall have jurisdiction over any matter that Title 42 United States Code section 300gg, et seq., permits, including jurisdiction over enforcement.

[(h)] (k) As used in this section, "small group health plans" means the medical plans currently offered, advertised, or marketed by a group health issuer for small employers."

SECTION 2. Section 431:10A-603, Hawaii Revised Statutes, is amended to read as follows:

"[[]§431:10A-603[]] Self-employed persons, exemption. The requirements of this article related to mandated coverages for persons insured under individual accident and sickness policies shall not apply to accident and sickness policies for self-employed persons in this State; provided that this exemption shall apply only to those portions of the individual accident and sickness policies that cover self-employed persons in this State."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on October 1, 2006.