BARRY AND BERRY FACKLER: Betty Fackler, a physical therapist who owns South Kona Physical Therapy, said she was thrilled when the Obamacare exchange was launched.
BARRY AND BERRY FACKLER: Betty Fackler, a physical therapist who owns South Kona Physical Therapy, said she was thrilled when the Obamacare exchange was launched.

BY MALIA ZIMMERMAN – HONOLULU, Hawaii – The number of small businesses that have signed up for health-care through Hawaii’s exchange network is decidedly miniscule.

Of Hawaii’s 30,000 small businesses, 296 registered for insurance through the Hawaii Health Connector by the Dec. 25 deadline, according to the exchange.

Some small businesses, we’ve found, have encountered problems even getting affordable health care through the exchange, qualifying for subsidies and tax breaks or even being able to sign up at all.

Betty Fackler, a physical therapist who owns South Kona Physical Therapy, said she was thrilled when the Obamacare exchange was launched. She thought she could get more affordable insurance for her employees, as well as federal tax credits and subsidies. She was wrong.

Fackler has always offered health care coverage for her employees who work more than 20 hours a week, the law in Hawaii since the passing of the 1974 Hawaii Prepaid Healthcare Act. In December she canceled her insurance with a local provider.

“I told my old insurance company we had to leave them for lower rates that were to be available in a larger risk pool and the federal tax credit, only available if I purchased through the connector,” Fackler said.

Instead, she said she was “shocked” by what happened next. Website glitches and bureaucratic red tape kept her from obtaining insurance and tax credits, and Fackler’s business lost its health insurance coverage altogether.

Her small business application was completed on the exchange website by Dec. 12 for coverage to begin Jan. 1. The calculation on the exchange showed her company was not eligible for a tax credit, but she used the calculator on the IRS website and learned otherwise. She appealed the decision but was told her business could not get coverage through the connector until March 1.

“Our calls to the connector, when we could get through, were met with resistance and no knowledge of any federal deadlines,” Fackler said.

She emailed Sen. Josh Green, D-Kona, chairman of the Senate Health Committee, about the problem.

Green passed her letter on to Tom Matsuda, the new executive director of the connector. Matsuda had two people help Green through what she called “the lengthy process of completing employee applications.”

“My IT insurance billing specialist had to work online with a contact person at the connector for several hours of the next two days to navigate through ‘error’ pages on the site and convoluted pathways. Once completed, we felt as though we had achieved a top level on a video game,” Fackler said.

The she got another unpleasant notice.

“You can imagine how surprised I was to find each staff member premium was priced substantially higher than they would have been on the individual charts, especially my 62-year-old male employee. I was sure there was an error and perhaps discounts hadn’t been applied. Maybe it was because they thought my employees were smokers and they had penalty-added pricing,” Fackler said, noting her employees also were wrongly listed on the bill as responsible for their own dental coverage.

She spent the week after the New Year trying to get the bill corrected by using emails, chat rooms and her phone.

Connector personnel and upper level managers told Fackler the employer prices were much higher than the rates for individuals shown on the website; the prices were from local insurance agency HMSA, and employers are set up in separate risk pools.

“I called my old insurance company and begged them to take back our little pool of three. They renewed our previous plan that is, incidentally or ironically, $7 per month less than the comparable HMSA plan on the connector,” Fackler said.

“I may not be eligible for the federal tax credit when I file in 2015, but who knows? Either way my employees have coverage retro to Jan. 1, 2014, and we are all happier now than we have been since this all started in November,” Fackler said.

Insurance industry experts told Hawaii Reporter about other problems with the state exchange, including a disparity in the number of people who actually signed up versus those who paid, leading to a bogus sales count. Part of the site that acts as a clearinghouse for back payments hasn’t been adequately tested, so while the consumer’s payment is supposed to be transmitted within 24 hours to the insurance company, that isn’t always the case.

Matsuda did not respond to request made through the connector’s public relations for comment on this story.