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The Honolulu Advertiser
Posted on: Tuesday, April 6, 2010

U.S. health care may not trump Hawaii's

By Derrick DePledge
Advertiser Government Writer

State Attorney General Mark Bennett said yesterday that he does not believe the new federal health care reform law repeals the state's Prepaid Health Care Act, which requires businesses to provide health insurance to employees who work at least 20 hours a week.

Hawai'i lawmakers have said it was their clear intent to preserve the state's law, but Gov. Linda Lingle has raised doubts about whether the landmark state law is protected.

The state law has a termination chapter in the event national health care legislation is passed. The chapter says the law will terminate on the effective date of federal legislation that provides for voluntary prepaid health care at least as favorable as the state law or mandatory prepaid health care.

Businesses could sue, arguing that when President Obama signed the federal law, the state law was repealed.

But Bennett said he doubts a court would agree.

"My bottom line is I don't believe a court would find that the president signing the bill repeals the Prepaid Health Care Act," he said.

U.S. Sen. Daniel K. Inouye, D-Hawai'i, said it was the intention of Hawai'i lawmakers to preserve the Prepaid Health Care Act and give Hawai'i residents the choice to keep the state law or transition to the federal law.

"I think our intentions were very clear," he said.

U.S. Rep. Mazie Hirono, D-Hawai'i, also told state lawmakers last week that the state law is preserved.

Hawai'i lawmakers inserted a provision that states that nothing in the new federal law should be construed to modify or limit the 1974 exemption for the state law.

Lingle, who opposed the federal health care reform law, said in an interview on PBS Hawai'i last week that she did not know if the state law is preserved.

According to Bennett and legislative staffers who have compared the two laws, it is doubtful that the voluntary health care coverage provided by businesses in the federal law could be viewed as favorably as the mandate under the state law.

However, in 2014, when the federal law requires that most people purchase health insurance and fines large businesses if the government has to subsidize worker health care, some may argue that could be considered a mandate under the state law and trigger a repeal.

State Rep. Ryan Yamane, D-37th (Waipahu, Mililani), the chairman of the House Health Committee, said state lawmakers would talk to the congressional delegation to see if changes are needed in federal or state law to protect the Prepaid Health Care Act.