RELATING TO HEALTH CARE PLANS FOR WORKERS.

HB1545

HOUSE OF REPRESENTATIVES

H.B. NO.

1545

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

Relating
to Health Care PLANS FOR WORKERS
.

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

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SECTION 1.
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The
legislature finds that Act 210, Session Laws of Hawaii 1974, also known as the Prepaid
Health Care Act (PHCA), was the first law in the nation to establish minimum
standards for employer-sponsored health care benefits for workers.
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The PHCA continues to support health and
economic prosperity in the State by offering regular employees access to adequate,
affordable health insurance through their employers.
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However, nontraditional workers, including
certain part-time employees, independent contractors, and self-employed
individuals that constitute a growing portion of the workforce in the State are
not covered by the PHCA.
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According to a
2021 department of business, economic development, and tourism report, from
2015 to 2019, 21.4 per cent of workers in the State had part-time jobs.
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The "gig economy", or independent
contractor workforce, is also expanding.
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As of 2022, approximately thirty per cent of the State's small business workforce
labored as independent workers in the gig economy.
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These significant segments of the State's
workforce are not eligible for employer-sponsored prepaid health care plans under
the PHCA and therefore rely on private or federally-subsidized health
insurance.

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The legislature further finds that the
passage of the One Big Beautiful Bill Act of 2025 may jeopardize the health
care of these nontraditional workers by reducing access to affordable health
insurance provided through federal programs such as medicaid.
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The resulting increase in the local uninsured
population would threaten the well-being and economic stability of much of the
State's workforce.
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Therefore, the
legislature believes it is necessary to establish a health insurance framework for
nontraditional workers in the State to safeguard their affordable access to
essential medical services.

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Accordingly, the purpose of this Act is to require
the department of labor and industrial relations, in consultation with the
insurance commissioner, to:

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(1)
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Establish
a voluntary portable health care benefit plan pilot program to offer high deductible
health plans or catastrophic health plans to workers not covered by the Hawaii
Employer-Union Health Benefits Trust Fund or the PHCA; and

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(2)
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Submit
annual reports to the legislature on the pilot program.

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SECTION 2.
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(a)
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The department of labor and
industrial relations, in consultation with the insurance commissioner, shall
establish and implement a five-year voluntary nontraditional workforce portable
health care benefit plan pilot program to expand access to basic affordable
health insurance for nontraditional workers not eligible for health benefits
provided pursuant to chapter 87A, Hawaii Revised Statutes, or a prepaid health care
plan pursuant to chapter 393, Hawaii Revised Statutes.
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The pilot program shall offer portable health
care benefit plans to nontraditional workers pursuant to the conditions
outlined in subsection (b).
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Any employee
or worker eligible for health benefits provided pursuant to chapter 87A, Hawaii
Revised Statutes, or a prepaid health care plan pursuant to chapter 393, Hawaii
Revised Statutes, shall not be eligible to participate in the pilot
program.
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The department may contract
with a private entity to administer the pilot program.

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(b)
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The
department shall develop standards and qualifications for the administration of
and participation in the pilot program, which shall at a minimum meet the
following requirements:

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(1)
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A
government entity or private entity may offer a portable health care benefit
plan;

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(2)
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Participation
by employers and nontraditional workers shall be voluntary;

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(3)
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The
department, in consultation with the insurance commissioner, shall:

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(A)
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Establish
standards of minimum essential benefit coverage for portable health care benefit
plans to be provided under the pilot program; provided that coverage for preventative
care, telehealth services, and mental health access shall be core benefits;
provided further that the standards shall emphasize coverage for emergency or
catastrophe protections;

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(B)
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Determine
optimal income thresholds and the levels of cost-sharing reductions on out‑of‑pocket
expenses to be allowed under the portable health care plans; and

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(C)
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Ensure
the pilot program and all health care benefit plans offered under the pilot
program are in compliance with applicable federal laws;

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(4)
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The
department may issue premium subsidies and vouchers to eligible individuals
enrolled in the pilot program.
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Any
moneys contributed by the State to a portable health care benefit plan and not
expended shall return to the general fund of the State and become general
realizations of the State should the individual beneficiary exit the pilot
program;

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(5)
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Contributions
to a portable health care benefit plan:

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(A)
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Shall
be voluntary; and

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(B)
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Shall
not be used as a criterion for determining a person's employment classification,
including for determining eligibility for prepaid health care pursuant to
chapter 393, Hawaii Revised Statutes; and

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(6)
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If
an internet or application-based company contributes to a portable health care benefit
plan for the benefit of an individual beneficiary:

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(A)
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The
contribution shall not be evidence of employer liability; and

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(B)
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A
court shall not construe the contribution as an element of an employment
relationship for the purposes of:

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(i)
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Employment security benefits pursuant to chapter 383, Hawaii
Revised Statutes;

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(ii)
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Workers' compensation pursuant to chapter 386, Hawaii Revised
Statutes; or

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(iii)
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Temporary disability insurance pursuant to chapter 392, Hawaii
Revised Statutes.

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(c)
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The department may adopt rules pursuant to chapter 91, Hawaii Revised
Statutes, to carry out the purposes of this Act.

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(d)
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The department, in consultation with the insurance commissioner, shall
submit annual reports on the development and implementation of the
nontraditional workforce portable health care benefit plan pilot program
established pursuant to this section, including impacts to statewide health
insurance enrollment, health care costs and affordability, health outcomes, and
any proposed legislation, to the legislature no later than twenty days prior to
the convening of the regular sessions of 2027, 2028, 2029, and 2030.

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(e)
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The
department, in consultation with the insurance commissioner, shall submit a
final report on the nontraditional workforce portable health care benefit plan
pilot program established pursuant to this section, including impacts to statewide
health insurance enrollment, health care costs and affordability, health
outcomes, recommendations on whether the pilot program should be extended or
made permanent, and any proposed legislation, to the legislature no later than
twenty days prior to the convening of the regular session of 2031.

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(f)
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For
the purposes of this section:

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"Catastrophic plan" has the same
meaning as defined in title 42 United States Code section 18022(e).

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"Department" means the department
of labor and industrial relations.

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"Health savings account" has the
same meaning as defined in title 26 United States Code section 223(d).

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"High deductible health plan" has
the same meaning as defined in title 26 United States Code section 223(c)(2).

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"Hiring party" means a person who
hires or enters into a contract for services with a nontraditional worker.
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"Hiring party" includes the State,
any of its political subdivisions, or any instrumentality of the State or its
political subdivisions.
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"Hiring
party" does not include:

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(1)
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The
Unites States government or any instrumentality of the United States;

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(2)
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Any
other state or political subdivision thereof or instrumentality of such state
or political subdivision;

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(3)
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Any
foreign government or instrumentality wholly owned by a foreign government;
provided that:

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(A)
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The
service performed in its employ is of a character similar to that performed in
foreign countries by employees of the United States government or of an
instrumentality thereof; and

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(B)
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The
United States Secretary of State has certified or certifies to the United
States Secretary of the Treasury that the foreign government, with respect to
whose instrumentality exemption is claimed, grants an equivalent exemption with
respect to similar service performed in the foreign country by employees of the
United States government and of instrumentalities thereof.

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"Nontraditional worker" means a
person who
performs a service for hire for a hiring party
pursuant to a contract
but is not a
n employee, as defined in
section 87A-1, Hawaii Revised Statutes, or

a
regular
employee
as defined in section 393-3, Hawaii Revised
Statutes,
and is not eligible for
health benefits under chapter 87A, Hawaii
Revised Statutes, or a
prepaid health
care plan

under
chapter
393, Hawaii Revised Statutes
; provided that "nontraditional
worker" does not include a
person employed in seasonal employment,
as defined in section 393-3, Hawaii Revised Statutes.
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"Nontraditional worker" includes
independent contractors, including

gig workers; part-time employees; sole
proprietors; and self-employed
individuals
.

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"Portable health care benefit
plan" means a group health care plan that:

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(1)
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Offers
a high deductible health plan or catastrophic plan in accordance with federal
law;

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(2)
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Offers
at least one health savings account-eligible plan option in accordance with
federal law; and

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(3)
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Is
assigned to an individual beneficiary and is not associated with a specific
employer or hiring party.

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(g)
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The nontraditional workforce portable health care benefit plan pilot
program shall cease to exist on June 30, 2031.

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SECTION 3.
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There is appropriated out of the general revenues of the State of Hawaii
the sum of $ or so
much thereof as may be necessary for fiscal year 2026-2027 for the development
and implementation of the nontraditional workforce portable health care benefit
plan pilot program established by section 2 of this Act.

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

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SECTION 4.
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If this Act or any provision of this Act conflicts at any time with any
federal law, then the federal law shall prevail and this Act or the relevant
provisions of this Act shall become ineffective and invalid.
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The ineffectiveness and invalidity of this
Act or any of its provisions shall not affect any other provisions or
applications of this Act, which shall be given effect without the invalid
provision or application, and to this end, the provisions of this Act are
severable.

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SECTION 5.
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If any part of this Act is found to be in conflict with federal
requirements that are a prescribed condition for the allocation of federal
funds to the State or the State's eligibility for federal waiver programs, the
conflicting part of this Act is inoperative solely to the extent of the
conflict and with respect to the agencies directly affected, and this finding
does not affect the operation of the remainder of this Act in its application
to the agencies concerned.

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SECTION 6.
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This Act shall take effect on July 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

DLIR;
Insurance Commissioner; Nontraditional Workforce
;

Portable
Health Care
Benefits; Voluntary
Pilot Program;
High Deductible Health Plan;
Catastrophic Health
Plan
; Health Savings Account; Reports;
Appropriation

Description:

Requires
the Department of Labor and Industrial Relations
, in
consultation with the Insurance Commissioner, to establish and implement a five-year
voluntary Nontraditional Workforce Portable Health Care Benefit Plan P
ilot
P
rogram
that offers
high deductible health plans
or
catastrophic health plans to nontraditional workers
who are
ineligible for
health
benefits provided by the Hawaii Employer-Union Health Benefits Trust Fund or
prepaid health care plans under the Prepaid Health Care Act
.
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Requires reports to the Legislature.
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Appropriates funds.

The summary description
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not legislation or evidence of legislative intent.