RELATING TO LONG-TERM CARE.

SB2931

THE SENATE

S.B. NO.

2931

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to LONG-TERM CARE
.

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 most long-term care needs are not covered by medicare or
most private health insurance plans, and that the private long-term care
insurance market is unaffordable or unavailable for most working families.
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The legislature further finds that
middle-income families are at significant risk because many residents have not
saved enough money to cover long-term care costs and are forced to spend down
limited assets to qualify for public assistance, placing family members and
caregivers at risk for their own future long-term care needs.

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The legislature also finds that the State
faces a convergence of demographic and economic pressures, including an aging population,
declining caregiver-to-elder ratios, high costs of health care, workforce
shortages in long-term services and supports, and inadequate retirement
preparedness, all of which increase reliance on medicaid long-term services and
supports and increase financial hardship for families.

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The legislature further finds that an
alternative, payroll‑based funding mechanism for long-term services and
supports can reduce hardship on families, lessen the long-term burden on medicaid,
and produce positive economic impacts by improving access to paid care,
supporting family caregivers, and reducing workforce disruptions.

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The legislature additionally finds that
program design should support consumer choice of setting and services, including
care in the home, community-based settings, assisted living settings, and
skilled nursing facilities, and should facilitate seamless transitions among
public and private sources of long-term care financing.

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Accordingly, the purpose of this Act is to
establish a statewide long-term services and supports trust program funded by
an employee payroll premium to provide a meaningful long-term care benefit, with
a benefit unit structure and approved services modeled on Washington's
long-term services and supports trust program, including portability and
prorated vesting for older workers, and to incorporate enhancements reflected
in the structure of recent long-term care programs in other states, including
structured options to promote supplemental private coverage, regulatory
modernization, and consumer education.

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SECTION 2.
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The Hawaii Revised Statutes is amended by adding a new chapter to be
appropriately designated and to read as follows:

"
Chapter

Hawaii
cares fund long-term services and supports trust program

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-1
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Definitions.
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As used in this chapter:

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"Activities of daily living"
means the functional activities of eating, toileting, transferring, bathing,
dressing, continence, and other activities as may be defined by the department by
rule for long-term services and supports programs.

"Approved service" means a long-term service or
support that is eligible for reimbursement under this chapter and includes:

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(1)
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Adult
day services;

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(2)
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Care
transition coordination;

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(3)
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Memory
care;

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(4)
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Adaptive equipment and technology;

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(5)
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Environmental
modification;

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(6)
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Personal
emergency response system;

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(7)
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Home
safety evaluation;

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(8)
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Respite
for family caregivers;

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(9)
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Home-delivered
meals;

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(10)
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Transportation;

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(11)
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Dementia
supports;

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(12)
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Education
and consultation;

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(13)
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Eligible
relative care;

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(14)
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Professional
services;

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(15)
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Services
that assist paid and unpaid family members caring for eligible individuals,
including training for individuals providing care who are not otherwise
employed as long-term care workers;

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(16)
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In-home
personal care;

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(17)
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Assisted
living services;

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(18)
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Adult
residential care home services; and

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(19)
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Nursing
facility services.

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"Benefit unit" means a unit of
benefits in the amount determined pursuant to section -7, paid
as reimbursement for approved services provided to an eligible beneficiary on a
specific date.

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"Commission" means the long-term
services and supports trust commission established pursuant to section -4.

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"Council" means the long-term
services and supports trust council established pursuant to section -5.

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"Department" means the department
of human services.

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"Director" means the director of
human services.

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"Eligible beneficiary" means a
qualified individual who has been determined by the department to meet the
functional eligibility requirements of section -7 and who:

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(1)
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Is
a resident of the State; or

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(2)
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Is
an out-of-state participant who has elected to continue participation pursuant
to section -13.

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"Eligible relative care" means
personal care services provided by a qualified family member, as determined by
the department by rule, including services provided pursuant to an eligible
beneficiary's care plan.

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"Employee" means an individual
performing services for an employer for remuneration, and includes any
individual in employment.

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"Employer" means any person,
including an individual, partnership, association, corporation, or governmental
entity, that employs one or more employees.

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"Exempt employee" means an
employee with an approved exemption pursuant to section -10,
-11, or -12.

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"Long-term services and supports"
means assistance with activities of daily living and other services and
supports designed to assist an individual to live independently and safely,
including approved services.

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"Long-term services and supports
provider" means an entity or individual, including a qualified family
member, that provides approved services and meets provider qualifications and
registration requirements established by the department by rule.

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"Premium" means the long-term
services and supports premium assessed on wages pursuant to section -9.

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"Program" means the Hawaii CARES
fund long-term services and supports trust program established under
section -2.

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"Qualified family member" means
an individual, including a family member or other person chosen by an eligible
beneficiary, who satisfies criteria established by the department by rule to
provide eligible relative care or other approved services, including training
or competency requirements, as applicable.

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"Qualified individual" means an
individual deemed by the department of labor and industrial relations to be a
qualified individual pursuant to section -6.

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"Self-employed person" means a
sole proprietor, independent contractor, partner, joint venturer, or other
individual who derives income from self-employment, as determined by the
department of labor and industrial relations by rule.

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"Wages" means all remuneration
paid by an employer to an employee for services performed, including
commissions, bonuses, and the cash value of all remuneration paid in any medium
other than cash, as determined by the department of labor and industrial
relations by rule.
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"Wages"
includes remuneration for services performed within or without the State as may
be necessary to administer section -13.

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-2
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Hawaii CARES fund long-term services and
supports trust program; established; purpose.
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(a)
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There is established within the department the Hawaii CARES fund
long-term services and supports trust program to provide eligible beneficiaries
with a lifetime long-term services and supports benefit payable in benefit
units for approved services.

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(b)
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The program shall be structured to:

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(1)
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Provide
meaningful financial assistance for approved services across home- and
community-based settings and institutional settings;

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(2)
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Promote
consumer choice of services and settings;

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(3)
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Facilitate
seamless transitions among private and public sources of long-term care
financing, including Medicaid long-term services and supports;

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(4)
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Support
paid and unpaid caregivers, including qualified family members, through
eligible relative care and caregiver supports; and

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(5)
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Encourage
innovation and supplemental private coverage to expand access to affordable
long-term care protection.

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-3
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Departmental duties; coordination among
agencies.
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(a)
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The department shall administer benefits
under this chapter and shall:

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(1)
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Determine
an individual's status as an eligible beneficiary pursuant to section -7;

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(2)
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Approve
the scope of approved services and establish by rule, the types of goods and
services that are and are not covered within each approved service category, in
a manner designed to maximize usage of all available public and private
benefits for eligible beneficiaries;

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(3)
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Develop
and implement a provider registration system for long-term services and
supports providers, including standards for provider qualification,
participation, suspension, and removal;

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(4)
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Develop
standards for qualified family members and eligible relative care, including
training and competency requirements, as appropriate, and procedures for reimbursement;

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(5)
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Disburse
benefit payments from the Hawaii CARES trust fund pursuant to section -8;

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(6)
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Provide
customer service, program materials, and operational support for applicants,
eligible beneficiaries, employers, and long-term services and supports providers;

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(7)
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Collect
and analyze program data to monitor program utilization, equity, workforce
impacts, and program outcomes; and

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(8)
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Adopt
rules pursuant to chapter 91 as necessary to implement this chapter.

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(b)
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The department of labor and industrial
relations shall administer premium assessment and collection under this chapter
and shall:

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(1)
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Assess
and collect premiums pursuant to section -9 and deposit
premiums as required under section -15;

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(2)
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Determine
an individual's status as a qualified individual pursuant to section -6;

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(3)
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Administer
exemptions and elections of coverage pursuant to sections -10
through -14;

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(4)
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Conduct
investigations to determine compliance with premium payment requirements;

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(5)
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Establish
employer remittance procedures, reporting requirements, and record retention
standards; and

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(6)
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Adopt
rules pursuant to chapter 91 as necessary to implement and administer its
duties under this chapter.

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(c)
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The department of commerce and consumer
affairs, through the insurance commissioner, shall implement section ‑18(a)
and shall coordinate with the department and the commission to support supplemental
private coverage and consumer protections.

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(d)
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The director of finance shall invest moneys in
the Hawaii CARES trust fund pursuant to section -16.

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(e)
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The department, the department of labor and
industrial relations, and the department of commerce and consumer affairs shall
enter into memoranda of understanding as necessary to coordinate eligibility
determinations, premium collection, data sharing, fraud prevention, provider
oversight, and consumer education, consistent with section -23.

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-4
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Long-term services and supports trust
commission; establishment.
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(a)
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There is established the long-term services
and supports trust commission to provide policy oversight and ongoing
recommendations regarding implementation and administration of the program.

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(b)
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The commission shall consist of the following fourteen members:

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(1)
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The
director, or the director's designee;

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(2)
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The
director of labor and industrial relations, or the director's designee;

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(3)
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The
insurance commissioner, or the commissioner's designee;

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(4)
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The
director of health, or the director's designee;

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(5)
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The
director of finance, or the director's designee;

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(6)
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One
member of the senate appointed by the president of the senate;

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(7)
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One
member of the house of representatives appointed by the speaker of the house of
representatives; and

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(8)
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Seven
members appointed by the governor to represent, collectively:

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(A)
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Employees
who are premium payers;

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(B)
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Employers
subject to premium collection requirements;

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(C)
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Long-term
services and supports providers, including home- and community-based providers;

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(D)
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Nursing
facility providers;

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(E)
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Consumer
advocates and family caregivers;

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(F)
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Individuals
with expertise in aging, disability, and dementia services; and

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(G)
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Individuals
with expertise in actuarial science, public finance, or long-term care
insurance.

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(c)
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Appointed members shall serve terms of four years and may be reappointed
for one additional consecutive four-year term; provided that initial
appointments shall be for staggered terms, as determined by the governor.
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Vacancies shall be filled for the unexpired
term in the same manner as the original appointment.

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(d)
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The commission shall elect a chairperson and vice chairperson from among
its members.
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The commission shall meet
at least quarterly and at other times as necessary.

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(e)
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Members of the commission shall serve without compensation but may be
reimbursed for reasonable expenses, including travel expenses, necessary for
the performance of their duties, subject to the availability of funds.

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(f)
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The commission shall:

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(1)
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Establish
policy recommendations and strategic priorities for program implementation and
administration;

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(2)
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Recommend
to the department and department of labor and industrial relations rules,
procedures, and operational standards necessary to implement this chapter;

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(3)
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Review
actuarial audits and valuations and advise the council regarding actions
necessary to maintain actuarial solvency, benefit adequacy, and administrative
sustainability;

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(4)
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Monitor
benefit utilization, access to approved services, provider network adequacy,
workforce impacts, and equity outcomes, and recommend improvements;

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(5)
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Develop
and oversee consumer education and outreach priorities pursuant to section -19;

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(6)
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Coordinate
with the insurance commissioner and stakeholders to promote a supplemental
private coverage framework pursuant to section -18;

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(7)
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Evaluate
potential program design enhancements reflected in other state long-term care
program structure, including options for progressive premium structures, wage
caps, contribution waivers for low‑wage workers, shared employer-employee
contribution approaches, and mechanisms to strengthen portability and benefit
adequacy; and

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(8)
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Submit
reports, including findings and recommendations, to the legislature pursuant to
section -20.

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-5
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Long-term services and supports trust
council; establishment.
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(a)
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There is established the long-term services
and supports trust council.
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The council
shall be responsible for setting the premium rate within the cap established by
section -9 and determining the annual benefit unit adjustment
pursuant to section -7, based on actuarial analysis and
program experience.

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(b)
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The council shall consist of the following five
members:

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(1)
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The
director of finance, or the director's designee, who shall serve as
chairperson;

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(2)
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The
director, or the director's designee;

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(3)
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The
director of labor and industrial relations, or the director's designee;

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(4)
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The
insurance commissioner, or the commissioner's designee; and

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(5)
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One
public member with expertise in actuarial science
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or public finance, appointed by the governor.

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(c)
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The
council shall:

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(1)
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Beginning
January 1, 2030, and biennially thereafter, set the premium rate pursuant to
section -9 at the lowest amount necessary to maintain
actuarial solvency of the program; provided that the premium rate shall not
exceed the maximum rate specified in section -9 unless
otherwise authorized by the legislature;

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(2)
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Determine
the annual adjustment to the benefit unit amount pursuant to section -7;

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(3)
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Require
a biennial actuarial audit and valuation of the program by an independent
actuary selected by the council through a procurement process, and consider
recommendations regarding solvency, benefit adequacy, contribution sufficiency,
and administrative costs; and

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(4)
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Submit
to the legislature and the commission, no later than twenty days after setting
or adjusting the premium rate or benefit unit amount, a report describing the council's
determination, the actuarial basis for the determination, and any
recommendations for legislative action.

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-6
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Qualified individuals.
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(a)
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Except
as provided in subsection (b), the department of labor and industrial relations
shall deem a person to be a qualified individual under this chapter if the
person has paid premiums required by section ‑9 for the
equivalent of either:

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(1)
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A
total of ten years; or

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(2)
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Three
years within the last six years from the date of application for benefits.

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(b)
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A person born before January 1, 1968, who has
not met the duration requirements under subsection (a)(1), may become a qualified
individual with fewer than ten years of premium payment if the person has paid
premiums required by section ‑9 for at least one year.
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A person becoming a qualified individual
pursuant to this subsection may receive one-tenth of the maximum number of lifetime
benefit units available under section -7 for each year of
premium payments; provided that nothing in this subsection shall prohibit a
person born before January 1, 1968, who meets the conditions of subsection
(a)(2) from receiving the maximum number of lifetime benefit units available
under section -7.

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(c)
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When deeming a person to be a qualified
individual, the department of labor and industrial relations shall require that
the person have worked at least five hundred hours during each of the years
counted toward subsection (a)(1), (a)(2), or (b), as applicable, in a manner
determined by the department of labor and industrial relations by rule.

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(d)
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An exempt employee shall not be deemed a
qualified individual unless:

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(1)
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The
employee's exemption was rescinded pursuant to section -10; or

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(2)
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The
employee's exemption was discontinued pursuant to section -12.

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(e)
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An out-of-state participant whose elective
coverage has been canceled by the department of labor and industrial relations pursuant
to section -13 shall not be deemed a qualified individual.

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(f)
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Benefits for eligible beneficiaries residing
in the State shall not be available until January 1, 2030, and benefits for out-of-state
participants who become eligible beneficiaries shall not be available until
January 1, 2034; provided that nothing in this chapter shall require the
department to accept applications for determining an individual's status as an eligible
beneficiary before January 1, 2030.

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-7
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Eligible beneficiaries; benefits
available; benefit units.
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(a)
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The department shall make determinations
regarding an individual's status as an eligible beneficiary.

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(b)
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The department shall determine that an
individual meets the functional eligibility requirements to become an eligible beneficiary
if the department determines that the individual either:

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(1)
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Is
unable to perform, without substantial assistance from another individual, at
least three of the following activities of daily living for at least ninety
days due to loss of functional capacity: eating, toileting, transferring,
bathing, dressing, or continence; or

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(2)
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Requires
substantial supervision to protect the individual from threats to health and
safety due to severe cognitive impairment.

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(c)
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The department shall ensure sufficient
assessor capacity and establish procedures to make functional eligibility determinations
within forty-five days from receipt of a completed request for benefits, except
as otherwise provided by rule for good cause.

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(d)
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The benefit unit amount shall be $100.
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Beginning January 1, 2031, and annually
thereafter, the benefit unit amount shall be adjusted by the council at a rate not
to exceed the percentage change in the Consumer Price Index for all urban
consumers for Honolulu, as published by the United States Bureau of Labor Statistics,
for the previous calendar year; provided that any adjustment shall be subject
to revision by the legislature.

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(e)
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Benefit units may be paid as reimbursement for
approved services provided to an eligible beneficiary on a specific date, in
the manner established by the department by rule.

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(f)
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The total lifetime limit of benefit units
available to an eligible beneficiary shall be three hundred sixty-five benefit
units.
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The department shall:

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(1)
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Authorize
payment of a partial benefit unit if the amount due for an approved service is
less than the benefit unit amount; and

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(2)
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Allow
an eligible beneficiary to combine benefit units to receive additional approved
services per day; provided that the total number of lifetime benefit units has
not been exceeded.

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(g)
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Benefits shall be payable only for approved
services and only after the individual has been determined to be an eligible beneficiary
and the services are consistent with a care plan or authorization process
established by the department by rule.

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-8
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Payment of benefits; provider
registration; qualified family member.
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(a)
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The department shall disburse
benefits from the Hawaii CARES trust fund to long-term services and supports providers,
as reimbursement, for approved services delivered to eligible beneficiaries, in
accordance with this chapter and rules adopted pursuant to this chapter.

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(b)
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The department shall establish, by rule:

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(1)
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Provider
registration standards, including provider qualifications, compliance
requirements, billing standards, and procedures for suspension and removal;

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(2)
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Procedures
for verifying delivery of approved services;

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(3)
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Procedures
for payment to long-term services and supports providers and, when appropriate,
reimbursement to eligible beneficiaries for approved services;

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(4)
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Standards
for qualified family members, including training and competency requirements
and safeguards to prevent fraud and abuse; and

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(5)
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Criteria
for approval of eligible relative care and payment for services delivered by
qualified family members, including services delivered outside the State for
eligible beneficiaries who are out-of-state participants.

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(c)
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The department shall coordinate payment of
benefits with other private and public sources of funding for long-term services
and supports, including medicaid long-term services and supports, to the extent
allowable under federal and state law, to maximize the benefit available to
eligible beneficiaries and support seamless transitions among funding sources.

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(d)
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The department may adopt rules establishing
prior authorization, care planning, and utilization controls necessary to
prevent inappropriate use of benefits, ensure program integrity, and preserve
solvency, while maintaining meaningful access to approved services.

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-9
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Premium assessment; rate; collection.
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(a)
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Unless otherwise exempted pursuant to this
chapter, beginning January 1, 2027, the department of labor and industrial
relations shall assess for each individual in employment with an employer a premium
based on the amount of the individual's wages.
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The initial premium rate shall be 0.58 per
cent of the individual's wages.

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(b)
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Beginning January 1, 2030, and biennially
thereafter, the premium rate shall be set by the council at a rate no greater than
0.58 per cent of wages; provided that the council shall set the premium rate at
the lowest amount necessary to maintain actuarial solvency.
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To facilitate premium rate setting, the council
shall require a biennial actuarial audit and valuation pursuant to section
-5.

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(c)
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The employer shall collect premiums from
employees through payroll deductions and remit the amounts collected to the department
of labor and industrial relations. In collecting employee premiums, the
employer shall act as the agent of the employees and shall remit the amounts as
required by this chapter and rules adopted pursuant to this chapter.

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(d)
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Premiums shall be collected in the manner and
at intervals as directed by the department of labor and industrial relations.
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To the extent feasible, the department of
labor and industrial relations shall use existing premium assessment, collection,
and reporting procedures used for other payroll‑ based contributions
administered by the department of labor and industrial relations.

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(e)
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The department of labor and industrial
relations shall deposit all premiums collected under this section into the Hawaii
CARES trust fund.

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(f)
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An employer may elect to pay all or part of an
employee's premium in addition to, or in lieu of, withholding from wages, as
permitted by rules adopted by the department of labor and industrial relations;
provided that any employer payment shall be treated as a payment to the program
and shall not create an employee entitlement beyond the benefit structure
established by this chapter.

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�
-10
�
Premium assessment; exemption for
employees with long-term care insurance.
�

(a)
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An employee who attests that
the employee has long-term care insurance purchased before January 1,
2028, may apply for an exemption from the premium assessment under section -9.

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(b)
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The department of labor and industrial
relations shall accept applications for exemptions only from July 1, 2026, through
December 31, 2027.
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Only employees who
are eighteen years of age or older may apply for an exemption.

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(c)
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The department of labor and industrial
relations shall not be required to verify an employee's attestation that the employee
has long-term care insurance.

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(d)
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Approved exemptions shall take effect on the
first day of the calendar quarter immediately following approval of the exemption.

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(e)
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Exempt employees shall not be entitled to a
refund of any premium deductions made before the effective date of an approved exemption.

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(f)
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An exempt employee shall provide written
notification of the approved exemption to all current and future employers. If
an exempt employee fails to notify an employer of an approved exemption, the exempt
employee shall not be entitled to a refund of any premium deductions made
before the written notification is provided.

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(g)
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Employers shall not deduct premiums after
being notified by an employee of an approved exemption.
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Employers shall retain written notifications
of exemptions received from employees.
�
Any
employer that deducts premiums after being notified of an approved exemption
shall be solely responsible for refunding to the employee any premiums deducted
after the notification.
�
The employer
shall not be entitled to a refund from the department of labor and industrial
relations for any premiums remitted on behalf of exempt employees.

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(h)
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Except as provided in subsection (i), an
exempt employee shall not become a qualified individual or eligible beneficiary
and shall be permanently ineligible for coverage under this chapter.

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(i)
�
Before
January 1, 2032, an employee who has received an approved exemption pursuant to
this section may rescind the exemption and participate in the program by
notifying the department of labor and industrial relations in a form and manner
established by the department of labor and industrial relations.
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Upon notification, the employee shall be
subject to premium assessments under section -9 or -14.

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The employee shall not be responsible
for premiums that would have been assessed before the rescission.
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When deeming a person to be a qualified individual
under section -6, the department of labor and industrial
relations shall not count any year during which the employee was exempt unless premiums
were assessed for part of the year and the minimum work hour requirement under
section -6 was satisfied.

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(j)
�
The department of labor and industrial
relations shall adopt rules necessary to implement and administer this section,
including rules governing applications and rescissions.

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�
-11
�
Premium assessment; exemption for certain
nonimmigrant visa holders.
�
(a)
�
An employee holding a nonimmigrant visa that
authorizes temporary work in the United States, as determined by the department
of labor and industrial relations by rule, shall not be subject to the premium
assessment under section -9 unless the employee notifies the
employer that the employee elects to participate in the program.

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(b)
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If an employee described in subsection (a) becomes a lawful permanent
resident or a citizen of the United States and is employed in the State, the
employee shall become subject to the premium assessment under section
-9 unless otherwise exempt pursuant to this chapter.

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(c)
�

The department of labor and industrial relations shall adopt rules
necessary to implement this section, including rules governing employee
elections and notification to employers.

����
�
-12
�
Premium assessment; voluntary exemptions.
�
(a)
�
An
employee may apply for an exemption from the premium assessment under section -9
if the employee is:

����
(1)
�
A
veteran with a service-connected disability rating of seventy per cent or
greater, as determined by the United States Department of Veterans Affairs, and
receiving compensation for the disability;

����
(2)
�
The
spouse or reciprocal beneficiary of an active duty service member who is
relocating as the result of a military transfer;

����
(3)
�
Employed
in the State but maintaining a permanent address outside the State; or

����
(4)
�
An
active duty service member engaged in off-duty civilian employment.

����
(b)
�

An employee seeking an exemption shall apply to the department of labor
and industrial relations in a manner prescribed by the department of labor and
industrial relations by rule.

����
(c)
�

An employer shall not deduct premiums after receiving written
notification from an employee of an approved exemption under this section.

����
(d)
�

An employee exempt under this section shall not become a qualified
individual or eligible beneficiary and shall be permanently ineligible for
coverage under this chapter unless the exemption is discontinued pursuant to
subsection (e).

����
(e)
�

An exemption under this section shall be discontinued when the employee
no longer meets the requirements for the exemption.
�
The employee shall discontinue the exemption
within ninety days of the change, and shall notify the department of labor and
industrial relations and the employer within ninety days.

����
(f)
�

An employee required to discontinue an exemption who fails to begin
paying premiums within ninety days shall be liable for unpaid premiums that
would have been assessed since the discontinuation, plus interest at one per
cent per month, as determined by the department of labor and industrial
relations by rule.

����
(g)
�

The department of labor and industrial relations shall adopt rules
necessary to implement and administer this section, including rules on
applications, approvals, discontinuations, and enforcement.

����
�
-13
�
Out-of-state participants; reporting;
collection of premiums.
�
(a)
�
Beginning January 1, 2030, an employee or
self-employed person who has elected coverage pursuant to section -14
and who relocates outside of the State may elect to continue participation in
the program if the person:

����
(1)
�
Has
been assessed premiums for at least three years and has worked at least five
hundred hours during each of those years in the State, as determined by the
department of labor and industrial relations by rule; and

����
(2)
�
Notifies
the department of labor and industrial relations, within one year of
establishing a primary residence outside the State, that the person is no
longer a resident of the State and elects to continue participation.

����
(b)
�

An out-of-state participant shall report wages or self-employment
earnings to the department of labor and industrial relations, and remit
premiums according to standards established by the department of labor and
industrial relations by rule; provided that the out-of-state participant shall
submit any documentation required under the standards even if the out‑of-state
participant has not earned wages or self-employment earnings during a reporting
period.

����
(c)
�

When an out-of-state participant reaches sixty-seven years of age, the
participant shall not be required to submit documentation pursuant to
subsection (b) unless the participant continues to earn wages or
self-employment earnings; provided that if the participant continues to earn
wages or self‑employment earnings, the participant shall report and remit
premiums pursuant to subsection (b).

����
(d)
�

An out-of-state participant who elects to continue participation
pursuant to subsection (a) shall remain covered by the program.
�
The department of labor and industrial
relations may cancel elective coverage if the out-of-state participant fails to
make required payments or submit required reports; provided that the
cancellation shall be effective no later than thirty days from the date of
written notice informing the out‑of-state participant of the
cancellation.

����
(e)
�

The department of labor and industrial relations shall adopt rules establishing
standards for reporting and remitting premiums by out-of-state participants,
including standards for verifying wages or self-employment earnings and
minimizing procedural burdens.

����
(f)
�

Entities providing approved services to an eligible beneficiary outside
the State shall comply with section -21 and any additional
nondiscrimination standards established by the department by rule.

����
(g)
�

Any participant who relocated outside of the State may elect to opt out
of continued participation by ceasing to report wages or self-employment
earnings to the department of labor and industrial relations in the manner
established by rule.

����
�
-14
�
Election of coverage; self-employed
persons.
�
(a)
�
Beginning January 1, 2027, any self-employed
person may elect coverage under this chapter.
�
Coverage shall be elected before January 1,
2030, or within three years of becoming self-employed for the first time,
whichever is later, in a manner established by the department of labor and
industrial relations by rule.

����
(b)
�

A self-employed person who elects coverage under this section shall be
responsible for payment of one hundred per cent of all premiums assessed under
section -9 and shall remit premiums to the department of labor
and industrial relations in the manner established by rule.

����
(c)
�

A self-employed person who has elected coverage shall not withdraw from
coverage, except as provided in subsection (d).

����
(d)
�

A self-employed person who elects coverage shall continue to pay
premiums until the person retires from the workforce or is no longer
self-employed.
�
To cease premium
assessment and collection, the person shall file a notice with the department
of labor and industrial relations, in the manner established by rule.

����
(e)
�

The department of labor and industrial relations may cancel elective
coverage if the self-employed person fails to make required payments or submit
reports as required.
�
The department of
labor and industrial relations may collect due and unpaid premiums and may levy
an additional premium for the remainder of the period of coverage.
�
The cancellation shall be effective no later
than thirty days from the date of written notice informing the self-employed
person of the cancellation.

����
�
-15
�
Hawaii CARES trust fund; established.
�
(a)
�

There is established in the state treasury the Hawaii CARES trust fund,
to be administered and expended by the department.
�
All receipts from employers and employees
under section -9 and out-of-state participants under section
-13, delinquent premiums, penalties, and interest received
pursuant to section -22, and any funds attributable to
savings derived through a waiver with the federal Centers for Medicare and Medicaid
Services pursuant to section -17 shall be deposited into the
fund.

����
(b)
�

Moneys in the fund shall be used to expand long-term care in the State,
including for:

����
(1)
�
Benefit
payments under this chapter; and

����
(2)
�
Administrative
activities necessary to implement and administer the program, including
activities of the department, the department of labor and industrial relations,
and the department of commerce and consumer affairs related to this chapter.

����
(c)
�
Moneys
in the fund shall not be used, either in whole or in part, to supplant existing
state or county funds for programs that meet the definition of approved
services.

����
(d)
�

The department shall submit a report to the legislature no later than
twenty days prior to the convening of each regular session to provide an
accounting of the receipts and expenditures of the fund.

����
(e)
�

If moneys in the fund are appropriated or expended for any purpose other
than as permitted in this chapter, the legislature shall notify each qualified
individual by mail that the person's premiums were used for an alternate
purpose, describe the alternate purpose, and state the plan for restoring the
funds so that premiums are not increased and benefits are not reduced.

����
�
-16
�
Hawaii CARES trust fund; investment;
policies.
�
(a)
�
The director of finance shall invest moneys in
the Hawaii CARES trust fund.
�
The
director of finance shall have full authority to invest, reinvest, manage,
contract, sell, or exchange fund assets, consistent with applicable state law
and prudent investment standards.

����
(b)
�
Investment and operating costs associated with
fund investments shall be paid from the fund.
�
Except for these expenses, all investment earnings
shall be retained in the fund.

����
(c)
�
Except
for investment expenses under subsection (b), disbursements from the fund shall
be made only upon the authorization of the director or the director's designee,
and moneys in the fund shall be expended only for purposes authorized by this
chapter.

����
(d)
�
The
director of finance and any board, committee, or agent acting within the scope
of delegated investment authority shall not be liable for any action or
inaction except for willful dishonesty or intentional violation of law.
�
The director of finance may purchase liability
insurance as appropriate.

����
�
-17
�
Data access; federal waiver; shared
savings.
�
(a)
�
The department shall:

����
(1)
�
Seek
access to medicare data from the federal Centers for Medicare and Medicaid Services
to analyze potential savings in medicare expenditures attributed to the
operation of the program;

����
(2)
�
Apply
for a demonstration waiver from the federal Centers for Medicare and Medicaid Services
to allow the State to share in savings generated in the federal match for medicaid
long-term services and supports and in medicare expenditures attributable to
the operation of the program; and

����
(3)
�
Submit
a report to the legislature on the status of the waiver, in accordance with
section 93-16, no later than December 1, 2027, and annually thereafter until
the waiver is approved or denied.

����
(b)
�
If
the State obtains a waiver that results in shared savings attributable to
long-term services and supports spending, the amount of shared savings shall be
deposited into the Hawaii CARES trust fund established pursuant to section ‑15.

����
�
-18
�
Supplemental private coverage framework;
innovation and regulatory modernization.
�

(a)
�
The insurance commissioner
shall, in consultation with the commission and the department, establish a
regulatory pathway for insurers to offer supplemental long-term care insurance
products designed to coordinate with the program.
�
The pathway shall, at a minimum, establish
standards for supplemental products that:

����
(1)
�
Recognize
the public benefit available under this chapter as a deductible or offset to
reduce consumer premium costs;

����
(2)
�
Provide
benefits that complement approved services and are designed to reduce medicaid
spend-down risk for middle-income households;

����
(3)
�
Are
portable and provide clear consumer disclosures regarding how benefits interact
with benefits under this chapter; and

����
(4)
�
Comply
with solvency, marketing conduct, and consumer protection standards established
by the insurance commissioner.

����
(b)
�
The commission shall establish an innovation
and market modernization working group to:

����
(1)
�
Evaluate
hybrid insurance models, including life insurance and long-term care
combination products, employer-based voluntary benefits, and other emerging
products;

����
(2)
�
Identify
barriers to affordability and availability of supplemental coverage and
recommend regulatory or statutory changes to address those barriers;

����
(3)
�
Monitor
impacts on medicaid long-term services and supports utilization and spend-down
trends and recommend strategies to align medicaid planning with private market
expansion; and

����
(4)
�
Recommend
updates to program design, portability standards, benefit unit adjustments, and
premium design options, consistent with actuarial solvency.

����
(c)
�
The department shall coordinate with
employers, insurers, labor organizations, and consumer groups to encourage
employer group plan options and voluntary benefits that complement the program
and expand uptake of supplemental coverage.

����
�
-19
�
Consumer education and outreach.
�
(a)
�
The
department, in consultation with the commission, shall implement a
multilingual, multimedia public education campaign to inform residents and
employers regarding:

����
(1)
�
The
availability and scope of benefits under this chapter;

����
(2)
�
The
distinction between medicare coverage and long-term services and supports
needs;

����
(3)
�
Coordination
of benefits among the program, private long-term care insurance, medicaid, and
other public programs;

����
(4)
�
Exemptions,
elections, and portability provisions;

����
(5)
�
Approved
services and the process by which eligible beneficiaries may access services;
and

����
(6)
�
Fraud
prevention and consumer protections.

����
(b)
�
The department shall prioritize outreach to
populations disproportionately impacted by long-term care costs and caregiving
burdens, including caregivers, older workers, individuals with disabilities,
and low- and moderate-income households.

����
�
-20
�
Annual reports; audits.
�
(a)
�
The commission shall submit a report to the
legislature no later than December 31 of each year, beginning December 31,
2027, that includes:

����
(1)
�
Program
implementation status and major administrative actions;

����
(2)
�
Premium
collections, expenditures, and fund balance;

����
(3)
�
Benefit
utilization data by approved service type and setting;

����
(4)
�
Demographic
and equity analyses of participation and benefit utilization;

����
(5)
�
Provider
network capacity and workforce impacts;

����
(6)
�
Actuarial
audit and valuation summaries and council determinations regarding premium rate
and benefit unit adjustments; and

����
(7)
�
Recommendations
for legislative or administrative actions to improve solvency, benefit
adequacy, and access.

����
(b)
�
The auditor shall conduct periodic audits of
the program and the Hawaii CARES trust fund, including financial and performance
audits, as determined appropriate by the auditor, and shall submit audit
findings to the legislature.

����
�
-21
�
Discrimination prohibited.

�
Any long-term services and supports provider
and any entity providing services to an eligible beneficiary under this
chapter, including services delivered outside the State to an eligible
beneficiary who is an out-of-state participant, shall not discriminate in the provision
of approved services on any basis prohibited by federal or state law, including
but not limited to race, color, religion, sex, sexual orientation, gender
identity or expression, age, disability, national origin, ancestry, or
preexisting condition, and shall comply with applicable state and federal nondiscrimination
laws.

����
�
-22
�
Enforcement; delinquent premiums;
penalties.
�
(a)
�
The department of labor and industrial
relations may investigate employer and individual compliance with premium
assessment, collection, reporting, and remittance requirements under this chapter.

����
(b)
�
If
an employer fails to collect, remit, or report premiums as required, the
department of labor and industrial relations may assess delinquent premiums,
interest, and penalties in a manner established by rule.
�
Interest shall accrue on delinquent premiums
at one per cent per month unless otherwise provided by rule consistent with
this chapter.

����
(c)
�
The department of labor and industrial
relations may establish by rule penalty schedules, notice procedures, and collection
remedies, including administrative offsets, liens, and other lawful collection
mechanisms, to ensure compliance; provided that due process protections,
including notice and opportunity to be heard, shall be provided.

����
(d)
�
The department of labor and industrial
relations shall adopt rules necessary to implement this section, including
rules regarding employer liability, recordkeeping, audits, and enforcement
coordination with other payroll-based contribution programs.

����
�
-23
�
Confidentiality; data sharing.
�
(a)
�
Personally identifiable information collected
or maintained by the department, the department of labor and industrial
relations, or the insurance commissioner for purposes of this chapter shall be confidential
and shall not be subject to public inspection, except as otherwise provided by
law.

����
(b)
�
The department, the department of labor and
industrial relations, and the insurance commissioner may share confidential information
with each other as necessary to administer and enforce this chapter, prevent
fraud, coordinate benefits, and evaluate program performance; provided that
information sharing shall be governed by written agreements and shall include safeguards
to protect confidentiality and data security.

����
(c)
�
Aggregate
data that does not identify individuals may be disclosed in reports required by
this chapter.

����
�
-24
�
Rules.
�

The department, the department of labor and industrial relations, and
the insurance commissioner shall adopt rules pursuant to chapter 91 as
necessary to implement this chapter, including rules regarding eligibility
determinations, benefit payments, provider registration, premium assessment and
collection, exemptions, elections, portability, fraud prevention, and consumer
protections."

����
SECTION 3.
�

There is appropriated out of the general revenues of the State of Hawaii
the sum of $4,500,000 or so much thereof as may be necessary for fiscal year
2026-2027 for the initial establishment and implementation of the Hawaii CARES
fund long-term services and supports trust program, including information
technology systems, rulemaking, staffing, outreach, and interagency
coordination.

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

����
SECTION 4.
�

If any provision of this Act, or the application thereof to any person
or circumstance, is held invalid, the invalidity does not affect other
provisions or applications of the Act that can be given effect without the
invalid provision or application, and to this end the provisions of this Act
are severable.

����
SECTION 5.
�

This Act shall take effect on July 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

DHS; DLIR;
Insurance Commissioner; Hawaii CARES Fund Long-Term Services and Supports Trust
Program; Payroll Premium; Benefit Units; Exemptions; Out-of-State Participants;
Supplemental Insurance; Consumer Education; Reports; Rules; Appropriation

Description:

Establishes
the Hawaii CARES Fund Long-term Services and Supports Trust Program within the
Department of Human Services to be implemented in collaboration with the
Department of Labor and Industrial Relations and the Insurance Commissioner, provide
eligible beneficiaries with a lifetime benefit for approved long-term services
and supports funded through payroll-based premium assessed on wages, with
exemptions and optional participation for self-employed persons and certain out‑of‑state
participants.
�
Establishes a trust fund
commission and council.
�
Establishes
premium assessment and collection requirements.
�
Provides cancellation procedures under certain
circumstances.
�
Establishes a
supplemental private coverage framework and consumer education requirements.
�
Establishes the Hawaii CARES trust fund and
investment requirements.
�
Requires DHS, DLIR,
and the Insurance Commissioner to adopt rules.
�

Requires reports to the Legislature.
�
Appropriates funds.

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