VANTAGGIO HR INC - Articles

BACK TO ARTICLES

Hawaii Premium Plus Program

Last Updated: June 7, 2010

On May 18th, Governor Linda Lingle announced a new temporary program that is designed to stimulate Hawaii's economy. As an incentive to hire unemployed individuals and create jobs, the Hawaii Premium Plus (HPP) program will reimburse employers up to $140 per month of the health insurance costs of each qualified new hire for up to 12 consecutive months. According to the state, this represents approximately one half of the cost to an employer to provide coverage to a single employee under Hawaii's Prepaid Health Care Act.

A Qualified Employer must:

have 50 or fewer employees as of January 1, 2010 (although the plan may be later expanded to employers with more than 50 employees)
intend to employ the new employee for at least 32 hours per week for at least 24 consecutive months;
hire the eligible employee between May 1, 2010 and April 30, 2011, and
increase total number of employees compared to January 1, 2010.

A Qualified Employee must:

be at least 18 and legally reside in Hawaii;

have been unemployed for at least six consecutive weeks;

have received or exhausted unemployment insurance benefits immediately prior to being hired; and

have or anticipate having a family income that does not exceed 450% of the federal poverty level for Hawaii. This calculation depends upon the number of individuals in the household and their combined gross income.

In order to participate, an employer must take the following steps:

Submit a one-time Application to Enroll Employer and Employer Participation Agreement (Form HPP 8000-T);
Submit a completed online Application to Enroll Employee (Form HPP 8000-U) for each qualified employee within two months of hire; and
Submit a completed online Quarterly Report (Form HPP 8000-V) by the fifteen of the month following each quarter.

HPP currently has an enrollment cap of 6,450 newly hired individuals. Once that threshold is met, the state intends to expand the program to employers with 50 or more employees. Once the enrollment cap has been met, the state's unemployment rate will be reduced from 7 percent to 6 percent. The hopes are obviously that Hawaii employers will create new jobs as a result of this initiative and place previously unemployed individuals in those new positions.

Concerns for Employers

As this program is brand-new, employers have many questions. The state's online materials have already been updated several times, so we expect that answers to some of these questions will become available over time. In the meantime, we urge our clients to consider the following:

Will this program really cause the creation of new jobs? As the reimbursement will only be available for qualified employees as described above, we wonder about how an employer will decide to create and recruit for a position without being certain in advance if the new hire will be eligible. Employers may want to consider directing their recruiting efforts towards unemployed individuals to maximize their chances of finding an eligible candidate. They can visit the Hawaii DLIR's HIRENET Hawaii to post jobs and review resumes.
How should an employer handle the request for sensitive information? As the eligibility for HPP depends upon the employee's family size and total household income, we urge our clients to exercise caution in asking these types of questions that could open the door to claims of discrimination. Our advice would be to only ask about HPP eligibility after the employee has been offered a position. While not required by the state, we would recommend obtaining the information in writing with a proper explanation to the employee of the reason for the request. The resulting information should not be used for any employment purpose other than the company seeking the reimbursement. For example, it would present risk to an employer who decides to terminate the employee or reduce his/her pay if he/she ended up not qualifying for the reimbursement. All related documentation should be kept separate from the employee's regular personnel file.
What happens if the employee is terminated? The HPP regulations state that an employer must "intend" to hire the new employee for at least 24 months. However, if the employee leaves voluntarily, the state will not attempt to recoup funds already paid to the employer. Likewise, repayment will not be required if the employer terminates the employee due to lack of work related to the state's economy or termination for cause. When an HPP participant is terminated, the employer will be required to send a termination notice via email to the state. They then also need to provide details including the date and reason for termination on the Quarterly Report.
How can an employer maintain their eligibility? The program clearly states that a company must increase its headcount by participation. We do not yet have any guidance about the enforcement of this requirement. For example, if several employees not participating in the HPP program resign resulting in a lower headcount from one quarter to another despite the creation of new jobs under HPP, would the employer lose eligibility? What happens if the employer total headcount decreases due to the closure of one of its locations?

For more information about HPP, please visit the state's website which contains links to all of the required forms as well as a Q&A for employers: Hawaii Premium Plus .

Other Help for Employers

Employers should keep in mind that this is only one of the various forms of assistance available to help ease the financial burden of having employees. Please make sure you are familiar with the following:

HIRE Act - which provides tax benefits for employers who hire previously unemployed individuals including an exemption of the employer's 6.2% share of the employee's social security tax.
Health Care Reform - which provides tax credits of up to 35% of the cost of providing medical insurance for small employers who provide these benefits.
Hawaii's Volunteer Internship Program - which allows employers to provide unpaid internships to certain previously unemployed individuals.
Hawaii's SEE Hawaii Work Program - which presents employers with prescreened job applicants whose pay and benefits are subsidized by the state, including on-the-job guidance and mentoring, childcare coverage, health insurance coverage, transportation and housing assistance.

We are ready to answer any questions you may have regarding Hawaii Premium Plus, and to assist with any other Human Resource matter. Please give us a call.