Thousands affected as local insurance company ordered into liquidation

Thousands of Hawaii residents will be losing their health insurance after a local company called Family Health Hawaii (FHH) was ordered into liquidation Thursday.

The order, signed by First Circuit Court Judge Karen Nakasone, authorizes insurance commissioner Gordon Ito to take possession and control of FHH’s assets as the liquidator and assume the powers of the company’s directors and officers for the protection of policyholders, creditors, and the public.

Health insurance companies in Hawaii are required to meet statutory solvency requirements which include maintaining minimum net worth to ensure that they are able to meet their obligations. FHH’s 2015 annual filings revealed that the company is below the minimum level required by law with no prospects of making up the deficit, officials said.

FHH had been working with the state’s examination team prior to the 2015 annual filing but had missed several key deadlines.

“We had hoped to be able to get the capital necessary to continue or go into rehabilitation, but it did not come to fruition,” said Family Health Hawaii president and CEO JP Schmidt.

“Our primary concern with the company is that when we got their March financial annual statement, it showed the company was insolvent by about $1.2 million and that to reach the statutory minimum, they needed an additional $3.7 million in capital infusion,” Ito explained. “We urge the member companies to really start calling other insurers to see what kind of coverage at what cost they can move their policy, their employees and their family members. It’s really important that they start doing that immediately.”

Family Health Hawaii currently insures approximately 420 employer group plans, and does not provide individual plans.

The Insurance Division is working to ensure that all groups are notified and transitioned off of FHH group plans in an expeditious fashion. Employer groups should contact their insurance broker or account management for assistance with the transition of coverage to a new insurer. For more information and assistance, employer groups and healthcare providers can call (855) 206-3277.

Employer groups can also contact HMSA, Kaiser, UHA and HMAA. These insurers are committed in assisting these groups in this difficult time.

  • HMSA: (808) 948-5555
  • KAISER: (808) 432-5237
  • UHA: (808) 532-4009; Toll Free (800) 458-4600, Ext. 301
  • HMAA: (808) 591-0088; Toll Free (800) 621-6998

For any other questions, please call (844) 717-7334 or visit Family Health Hawaii’s website.

Hawaii consumers can call Hawaii Insurance Division’s Health Branch at (808) 586-2804 or visit the branch’s website.

More information is available at the following links:

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