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The Honolulu Advertiser

Posted on: Friday, April 1, 2005

Health insurance audits begin on local businesses

By Deborah Adamson
Advertiser Staff Writer

State labor officials have started to randomly audit local businesses to make sure that every worker who qualifies for health insurance is given coverage.

Who to call about coverage

If you're uninsured but believe you're entitled to health insurance, call the state Labor Department and ask for the Disability Compensation Division.

In O'ahu: 586-9200

In Hawai'i County: 974-6464 (Hilo), 322-4808 (Kona)

In Maui County: 243-5322

In Kaua'i County: 274-3351

You can also e-mail the state labor director at dlir.director@hawaii.gov.

In February, the state Department of Labor and Industrial Relations began sending out investigators to make sure businesses are complying with the Hawai'i Prepaid Health Care Act. Thus far, they've looked at 16 firms.

"Our goal is to go in there, and if a company is not in compliance, we give them a chance to comply," said state Labor Director Nelson Befitel. "After a year, we'll see if any particular industry is prone to violating this law."

Unique to Hawai'i, the Prepaid Health Care Act states that employees who work at least 20 hours a week for at least four straight weeks and earn at least $542 a month should get healthcare coverage from employers.

Thus far, investigators have found one employee out of 39 who did not get the entitled health coverage. However, many businesses didn't have updated forms showing which workers had waived health insurance because they're covered under a spouse's plan — a minor violation.

Businesses scrutinized included retail shops, restaurants and consulting firms.

The Chamber of Commerce of Hawaii, which represents 1,100 companies, expressed doubts about the need for such audits.

"I continue to question the necessity of conducting the audit because I question the extent of the misuse," said Jim Tollefson, chamber president.

Befitel acknowledged that most of the businesses visited "were bothered by the inconvenience. They were suspicious why they were selected."

Over a year, the state will be investigating small and large firms chosen randomly by computer. O'ahu County investigators will get a list of 60 companies per month to audit, Maui County will get 25, while Hawai'i and Kaua'i counties will get 24 and 12, respectively.

Companies that purposely avoided providing health insurance will be penalized. But penalties may be waived if the business quickly complies with state law and pays the medical bills of the eligible employees.

The audit was spurred by a report last October from the Hawaii Institute for Public Affairs. It found that 31,000 people, or a quarter of the state's 120,000 uninsured, were adults working more than 20 hours a week for one company. As such, they probably qualified for healthcare coverage from their employer.

Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.