HONOLULU (HawaiiNewsNow) - The state has ordered Family Health Hawaii to liquidate because it didn't meet solvency requirements. Its 7,000 members will be transitioned to other health plans.
State Insurance Commissioner Gordon Ito ordered the health insurance company into liquidation Tuesday, and took possession of its assets.
Ito said the move was necessary after the plan's 2015 annual filings showed FHH had no prospects of making up a deficit and didn't meet net worth requirements.
Family Health Hawaii covers 420 employer groups.
"This is a regrettable situation. However, once we determined the degree of the existing financial hazard, the decision was made to protect the policyholders and creditors," Ito said, in a news release.
"Further delay would only increase the risk of loss and jeopardize FHH's policyholders' access to healthcare and providers under their plans.
FHH said in a news release that it had been working to address its capital requirements, but had not been able to meet the state Insurance Division's demands. Family Health also said Obamacare raised its costs.
FHH was launched in 2014, and was headed by J.P. Schmidt, who served as Hawaii's state insurance commissioner from 2003 to 2010.
The insurance division said it will work with employer groups to transition FHH members to other plans.