HB697.DOC

SECTION 1. A number of Hawaii-based companies have closed or filed for bankruptcy in 2008, resulting in layoffs and furloughs. Employees of large, well-established companies including airlines, cruise lines, agricultural companies, and retailers, as well as small businesses, have been drastically affected by the economic downturn.

In December 2008, the state reached a nine-year high unemployment rate of 4.9 per cent. Over 32,000 individuals were unemployed in November 2008, an increase of over 2,000 from the previous month. By comparison, only 18,850 were reportedly unemployed in late 2007.

The downturn in nearly every private-sector industry has caused significant numbers of Hawaii residents to be victims of employment furloughs, layoffs, reduced work hours, and terminations. While these individuals may obtain some financial relief through employment insurance benefits, they may not be able to continue their health care insurance coverage.

The purpose of this Act is to help unemployed individuals maintain health care coverage by providing a temporary health insurance program.

SECTION 2. (a) There is established the temporary health insurance for unemployed persons program within the department of human services to provide temporary health coverage for persons who have become unemployed on or after March 31, 2008.

(b) To be eligible to participate in this program, the individual shall:

(1) Have lost the person's health insurance as a result of a furlough, a layoff, reduced work hours, or termination of employment on or after March 31, 2008;

(2) Not be eligible for any health insurance coverage from another source; and

(3) Agree to pay for the costs of the individual's coverage premium.

(c) This program shall have a benefit package similar to the basic benefits provided by the department of human services' QUEST-Net program and shall be administered by the department of human services.

SECTION 3. (a) If an individual is entitled to continue health insurance coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA), the individual may apply for reimbursement of payments made for the purpose of continuing the individual's health insurance medical and prescription drug coverage up to the following monthly amounts:

Single: $125.00

Family: $315.00

(b) The total reimbursement an individual may collect under this section shall be for three months of coverage from the effective date of the individual's loss of coverage.

(1) The person became unemployed, was furloughed, or suffered a reduction of work hours which has resulted in the loss of the person's employment-related group health insurance which occurred on or after March 31, 2008, and is ineligible for any other insurance through the individual's spouse or parents;

(2) The person is entitled to continue health insurance coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA);

(3) The individual is not eligible for any other employment-related group health coverage reimbursement or subsidy aimed to assist the unemployed person in continuing the individual's group health insurance coverage;

(4) The individual discloses and certifies in writing the amount paid by the individual for prescription and medical coverage for the three-month period beginning on the effective date of the individual's loss of coverage; and

(5) The individual's employer certifies in writing that the individual is not entitled to any other subsidy offered by the employer or the employer's health insurer.

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $1,587,600 or so much thereof as may be necessary for fiscal year 2009-2010 and the sum of $1,360,800 or so much thereof as may be necessary for fiscal year 2010-2011 to administer the temporary health insurance for unemployed persons program established under this Act.

The sums appropriated shall be expended by the department of human services for the purposes of this Act.

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $2,000,000 or so much thereof as may be necessary for fiscal year 2009-2010 for the reimbursement of payments for persons entitled to continue health insurance coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA) made under this Act.

The sum appropriated shall be expended by the department of labor and industrial relations for the purposes of this Act.

SECTION 6. This Act shall take effect on July 1, 2009, and shall be repealed on June 30, 2010.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	697
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII