What Hawaiian Employers Need to Know about the Hc-5 Waiver

November 23, 2018 Written by Oralie Chapman

As we approach the end of the year, HR managers should be going over each employee’s health care coverage for 2019. Most employees sign up for their employer’s health insurance but some are entitled to claim an exemption from coverage and choose to do so. In these cases, employers must submit the Hc-5 waiver which is used to exempt employees from healthcare insurance. Hawaiian employers who are subject to the Prepaid Health Care Act (PHCA) should be familiar with the Hc-5 waiver.

In Hawaii, Hc-5 waivers do NOT roll over. Employees must re–submit an “Employee Notification to Employer” (form Hc-5) to their employer before the end of each year. Employers are responsible to collect the document, retain the original and give a copy to the employee. The employer must then submit a copy to the State of Hawaii Department of Labor and Industrial Relations (DLIR) in certain circumstances. The waiver is binding for one year and must be renewed every December 31. Click here to access Form Hc-5 Employee Notification to Employer for Calendar Year 2019.


What employees are eligible to decline health coverage?


According to the State of Hawaii Department of Labor and Industrial Relations (DLIR), employees who fall into one of these categories may claim an exemption from health coverage required under the PHCA:


· Employees who are covered as a dependent under a qualified health care plan;

· Employees who are covered under a Federal health insurance or prepaid health care plan including Medicaid, Medicare or VA benefits;

· Employees who are already receiving health care covered from their “primary employer”;

· Employees who receive public assistance or those who are covered by a State-legislated health care plan governing medical assistance;

· Employees who are part of a religious group that chooses prayer or other types of spirituality for healing; and

· Employees who have other health insurance that meets the minimum standards required by the PHCA.


Employees who waive health care coverage for any other reason than that they have other health insurance should check box #2 or box #3 on their Hc-5 waiver form. Employers are not automatically required to submit these forms to DLIR but they must keep them on file for two years from the date of signature in case the agency requests to see a copy.


Employees who waive health coverage because they have other qualifying health insurance should check box #4 on their Hc-5 waiver form. DLIR must review and approve that the employee has other health insurance that meets PHCA's minimum requirements. To gain approval the employee must submit a copy of their other health insurance plan along with the Hc-5 for the purpose of forwarding to the DLIR. If the DLIR denies the waiver because the other health plan does not meet minimum requirements, employees should sign up for one of their employer’s healthcare plans or re-submit the waiver by checking another box that applies.


Partnering with Makai HR


Not excited about human resources details? That’s okay; we’ve got you covered through HR outsourcing! When you partner with Makai HR you can get on with the business you are trying to grow while we take care of your employee needs from payroll to taxes, health insurance/benefits and worker’s compensation. You also gain peace of mind that you are in compliance with all of Hawaii’s employer laws (if you’ve ever looked you know that the list is very long). When choosing a PEO to partner with, there are many things to consider including cost, services and technology solutions.


With the cost of doing business in Hawaii at record highs, we know how important it is to keep labor costs in line with revenue. Our plans are priced competitively and include value-added services like time-in/time-out systems. Our three tiers of PEO service plans are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet or phone. We can truly improve your employees work benefits while freeing you up to run your business.


What are you waiting for? Companies who partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact us today to get started!