Kaiser said its 7,000 commercial members, or employers, will be able to sign up for the new plan throughout the year as they renew their contracts. It is too early to tell how many will opt for it, Kaiser said.

The Advertiser first reported on Kaiser's new plan on Jan. 22, but failed to make clear that the plan is an option which employers can choose as a way to keep their premium increases low. Employers also have other choices, including the option of paying a higher premium to avoid any increase in service fees.

Kaiser covers about 233,000 people in Hawai'i, making it the state's second largest health plan behind the Hawaii Medical Service Association.

Kaiser said its "most vulnerable members, which include seniors, those receiving financial assistance and those receiving or planning for in-patient care" will not be affected by this change.

The new plan will not apply to Kaiser members who get their insurance through Medicare (the federal health insurance for seniors), Medicaid/Quest (a state health insurance program for disadvantaged or low-income people) or the state. It also won't apply in cases where the union has negotiated enhanced benefits nor to individual plan members.

When a company does opt for the new plan, their premiums might not go up as much as it could otherwise, said spokesman Scott Nariyoshi.

The trade-off is that fees will increase for members under the cost-share plan option, including office visit co-payments going up from $10 to $12 and patients being charged 10 percent of outpatient lab, X-ray and diagnostic tests. Previously, Kaiser paid for the tests entirely. Certain preventive screenings such as mammograms and routine pap tests are exempt.

While no one likes fee increases, Nariyoshi said, the health plan is trying to meet business demands to keep premium increases low.

Nationwide, healthcare costs per capita have been rising by 5.9 percent a year from 1990 to 2002, according to the Henry J. Kaiser Family Foundation in Menlo Park, Calif., a nonprofit foundation whose only connection to Kaiser Permanente is that they share the same founder.

Businesses have been looking for ways to cut back on premiums and health insurers have answered the demand by offering health plans that shift more of the cost to workers. Last year, a Kaiser foundation study showed that half of companies nationwide with 200 or more employees say they are "very likely" to increase employee contributions.

Last year, HMSA introduced CompMed, a new health plan that has slower premium rate increases because employees share more of the expenses.

In Hawai'i, insurers are restricted in healthcare plan options by the state's Prepaid Health Care Act. The act sets a floor for benefits that must be offered by employers to employees who work at least 20 hours per week for four straight weeks. The act also states that the employee's share of premiums cannot exceed 1.5 percent of the employee's salary. One option for employers wanting to keep premiums down is to increase fees for using services.

Rising longevity — in part due to advances in medical technology —malpractice lawsuits and higher prescription drug costs are causing healthcare costs to rise, according to the Kaiser foundation.