Hawaii Premium Plus Job Creation

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By Pearl Imada Iboshi

Now that our state economy is showing beginning signs of recovery, many employers in the private sector are likely pondering the following question: “Is this a good time to expand operations and increase staffing?”


Economists have pointed out that jobs will lag other economic indicators, but until jobs grow the recovery will not be complete. To spur job growth, the state government is offering companies a temporary financial incentive for hiring new employees.

Under the Hawai‘i Premium Plus jobs creation initiative launched this month, the State will subsidize the health insurance premiums of newly hired workers for up to one year.

This monthly reimbursement of up to $140 – up to $1,680 for an entire year – represents half the average cost of insuring a full-time employee under the Hawai‘i Prepaid Health Care Act.

The goal of Hawai‘i Premium Plus is to get our residents back to work and reduce the state’s unemployment rate by one percentage point. To be eligible, individuals must be hired for full-time jobs before the enrollment cap of 6,450 is reached, or no later than April 30, 2011.

Governor Linda Lingle discussed her plans for this jobs creation initiative when she and other governors met with President Obama at the White House in February during the National Governors Association annual meeting.

President Obama expressed support for the plan and asked U.S. Secretary of Health and Human Services Kathleen Sebelius to expedite federal approval – and that’s exactly what occurred. Two months after Governor Lingle’s visit to Washington, Hawai‘i received written approval to use federal matching dollars to help pay the health insurance costs for newly hired workers.

Now Hawai‘i Premium Plus is starting to attract attention from other states, and this initiative is being labeled a national model for creating jobs and expanding health insurance coverage.

In addition to helping unemployed people obtain jobs and health insurance, Hawai‘i Premium Plus stimulates our economy by bringing in millions of extra dollars in federal funds and state tax revenues.

According to an analysis by the economists at the Department of Business, Economic Development and Tourism, Hawai‘i Premium Plus will produce a net increase of more than $6.1 million in state tax revenue during its first year and a net increase of nearly $13.9 million in its second year.

The program will also generate savings for taxpayers by reducing applications for Medicaid, welfare, nutrition benefits and other forms of public assistance. In addition, it will also reduce the drain on the Unemployment Insurance Trust Fund, which will provide further savings of more than $50 million.

To be eligible for this program, employees must be 18 or older, legally residing in Hawai‘i and have been unemployed for at least six consecutive weeks prior to being hired at their new jobs. They must also have received or exhausted their unemployment insurance benefits.

Eligible employees can have gross annual incomes up to 450 percent of the Federal Poverty Level for Hawai‘i. That generous income limit means people can be hired for good-paying jobs in a wide variety of fields.

For example, a single individual can earn up to $56,100 annually and still qualify. Someone from a four-person household can earn up to $114,156 and someone from a five-person household can earn up to $133,488.

It’s also easy for businesses to participate in Hawai‘i Premium Plus. The program is initially open to companies with 50 employees or less – to give them a head start – but companies of any size can sign-up starting in July.

Companies must hire their new workers on a full-time basis (at least 32 hours per week), intend to retain them for at least two years and provide a health insurance plan meeting all requirements of the Hawai‘i Prepaid Health Care Act.

Additional information and application forms for businesses are posted online at: https://www.PremiumPlus.hawaii.gov

It will probably take several years for Hawai‘i’s economy to return to the pre-global recession levels. But the Lingle-Aiona Administration’s innovative job creation Hawai‘i Premium Plus program, thousands of our residents will re-enter the workforce and regain their health insurance coverage. That’s great news for all the people of Hawai‘i.

Pearl Imada Iboshi is the Deputy Director and State Economist for the Department of Business, Economic Development and Tourism