Posted on: Wednesday, October 3, 2001

The September 11th attack
Health insurers helping employers, laid off workers

By Frank Cho
Advertiser Staff Writer

Hawai'i's two biggest health insurers have stepped up to help thousands of struggling employers and residents who have lost their jobs as the state's economy has slowed since the Sept. 11 attacks.

The Hawaii Medical Service Association, the state's biggest medical health insurer, has launched a $50 million program for members that includes direct payments and allowances for financially struggling employers. Kaiser Permanente, Hawai'i's largest health maintenance organization, has not established a program but has been working with individual employers who are struggling.

"The dramatic effects of the slumping economy are upon us, and this emergency is testing companies and families across our state," said Robert Hiam, HMSA's president and chief executive officer.

The terrorist attacks staggered Hawai'i's already slowing economy. Since the attacks, more than 8,000 people have filed for unemployment benefits as employers cut hours and lay off workers to try to cope with the downturn in tourism.

For members laid off because of the economic impact of the attacks, HMSA said it will subsidize health care coverage payments for those who do not have access to alternative health coverage. For companies with 20 or more employees, laid-off workers can enroll in COBRA (the Consolidated Omnibus Budget Reconciliation Act of 1985) through their employer.

For employees from companies with fewer than 20 workers, HMSA has created a plan specifically for this situation.

"The September 11th Member Protection Program is in direct response to Hawai'i's rapid economic downturn. In short, this is an emergency situation. As such, the board voted to use the strength of the association's reserves to respond," said Cliff Cisco, senior vice president for HMSA.

HMSA, which has more than 600,000 members, said it will subsidize 50 percent of the member's monthly dues for the first three months. Children of parents who have been laid off will be covered at no additional cost for the first three months. Any HMSA member laid off between Sept. 11 and Jan. 1 can apply for the subsidy. The subsidies are expected to save consumers about $15 million.

The second part of the program aims to help employers, who often pay a large portion of their workers' health premiums.

Employers can apply for an allowance that would equal about 5 percent of their health plan dues. About 10,000 business are expected to qualify for the allowance payments. HMSA said this component of the plan would save employers an estimated $35 million in premiums. HMSA has more than $500 million in reserves and has refunded $45 million in premiums over the past six years.

Details of the program will be mailed to employers over the weekend and allowance checks are scheduled to be mailed later this month.

A Kaiser spokeswoman said the HMO has been working with employer groups on a case-by-case basis.

Jan Kagehiro said Kaiser is looking at what more it can do to help its members, but has not decided on a specific plan.