Gov. Linda Lingle moved to implement an innovative jobs creation initiative she first introduced in her State of the State Address in January that would incentivize private sector companies and non-profit organizations to hire unemployed residents by subsidizing their health insurance premiums for up to a year.

The new Hawai‘i Premium Plus program will reimburse employers up to $140 per month for each qualified person hired through this initiative. This $1,680 one-year reimbursement represents roughly half of what it costs a company to provide health insurance for a full-time employee for one year.  The program will cost a total of $10.8 million, with 65 percent of these funds coming from the federal government.

When Hawai‘i Premium Plus reaches its enrollment cap of 6,450 newly hired individuals, it would be the equivalent to a reduction in the state unemployment rate from 7 percent to 6 percent. These individuals must have been unemployed for six weeks or longer prior to being hired.  Employees hired between May 1, 2010, and April 30, 2011 can qualify for this program.

According to an analysis by the State Department of Business, Economic Development and Tourism, Hawai‘i Premium Plus is expected to produce a net increase of more than $6.1 million in State tax revenue during its first year and nearly $13.9 million during its second year.  It will also reduce the drain on the State Unemployment Insurance Trust Fund, potentially saving more than $50 million.

Governor Lingle discussed her plans to seek Medicaid federal matching funds for this jobs creation initiative when she and other governors met with President Barack Obama last February at the National Governors Association meeting in Washington, D.C.  U.S. Health and Human Services Secretary Kathleen Sebelius was also at that meeting.  Hawai‘i recently received federal approval.

“States are important partners in encouraging job growth and improving the health security of American families,” said Cynthia Mann, director of the Center for Medicaid, CHIP and Survey & Certification. “I commend Hawai‘i for its commitment to working with businesses to create more jobs and expand affordable health coverage.”

“This innovative program will assist thousands of people who currently receive or have exhausted their unemployment insurance benefits by helping them obtain jobs and health coverage,” Governor Lingle said.

Qualified employees can have family incomes up to 450 percent of the Federal Poverty Level. For example, a single-person household can have a gross annual income of up to $56,100 and still qualify. A family of four can have a gross annual income of up to $114,156 and qualify.

“Hawai‘i Premium Plus will stimulate our state economy by reducing the unemployment rolls, encouraging businesses across the Islands to expand, and bringing in millions of new federal dollars,” the Governor said.

Information for employers, including application forms and a list of frequently asked questions, is available online at www.PremiumPlus.hawaii.gov

Report by Lenny Klompus, governor’s office

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