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Hawaii business insurance: requirements and costs

Hawaii has the most expensive workers' comp in the country on both official measures: employers spent $1.62 per $100 of covered wages in 2023, and Oregon's 2024 rate ranking put the state first at 231% of the median.⁠8⁠9 Loss costs are coming down slowly. NCCI filed a 4.4% decrease for January 1, 2026 and has asked for another 2.5% for January 1, 2027.⁠1⁠2 Comp is only part of the payroll-based insurance bill: employers must also provide temporary disability insurance and, for anyone working 20 hours a week, group health coverage.⁠6⁠7

Checked against 10 sources Last reviewed How we check figures

Hawaii at a glance

Workers’ comp requiredCheck with the state
Where employers buy itPrivate insurers
Rates set byNational Council on Compensation Insurance
Employer comp cost, 2023$1.62 per $100 of covered wages (US $0.98)
Comp rate index, 2024$2.52, ranked 1 of 51 (1 = most expensive)
Employer health premium, 2025$8,285 single, $23,603 family (average total premium)
Auto liability minimum40/80/20
Payroll insurance programsTemporary Disability Insurance (TDI)

NCCI files loss costs for Hawaii, which cover expected claims but not insurer expenses, and each carrier files its own rates and loss-cost multiplier on top. Comp rate filings need prior approval and carry a 90-day waiting period.⁠4⁠2 So two businesses in the same class can get quite different quotes, and the gap comes from each carrier's multiplier and credits, not from different loss costs.

The recent decisions have all gone down. On November 27, 2024 the Insurance Division approved a 3.5% average decrease for January 1, 2025.⁠3 NCCI then filed a 4.4% cut for January 1, 2026, based on policy years 2021 to 2023 and a claim frequency that has fallen gradually for several years.⁠1 On August 27, 2026 it filed a further 2.5% cut for January 1, 2027, which the Division has not yet ruled on. That filing notes that policy year 2023 had the worst loss ratio of the three years it used, partly because of large losses. Frequency is falling about 1.5% a year, while average medical and indemnity costs per claim have generally grown faster than wages.⁠2 By our calculation, if the 2026 filing took effect as filed, the two cuts together lower loss costs by about 7.7% (0.965 × 0.956) from the 2024 level. That moves the base, not your premium: your class, carrier multiplier and experience mod still decide what you pay.

On cost, Hawaii is an outlier. NASI puts employer comp spending at $1.62 per $100 of covered wages in 2023, about 65% above the national $0.98 by our calculation. Hawaii's figure was $1.57 in 2019, when the national figure was $1.17, so Hawaii held steady while costs fell elsewhere.⁠8 Oregon's 2024 ranking applies each state's rates to the same 50 classes and gives Hawaii an index of $2.52, highest of the 51 jurisdictions.⁠9 The Insurance Commissioner describes Hawaii as providing among the strongest worker protections in the country.⁠3 For 2026 the maximum weekly comp benefit is $1,240, set from a state average annual wage of $64,471.82.⁠5 Hawaii businesses paid $360.4 million in direct comp premiums in 2024, up 3.7% from 2023.⁠3

Health insurance shows the opposite pattern. The Prepaid Health Care Act of 1974 requires employers to give health coverage to employees who work at least 20 hours a week and earn at least 86.67 times the state minimum wage a month, which is $1,387 in 2026. Coverage starts after four consecutive weeks of work.⁠7⁠5 The employer pays at least half the premium. The employee's share is capped at 1.5% of wages, and the employer pays the rest.⁠7 AHRQ's 2025 survey shows the effect: 75.5% of Hawaii private employers offered health insurance, against 49.2% nationally, and 67.6% of firms under 50 employees did, against 32.1%. The average single premium was below the national figure, $8,285 against $9,025, and employees paid $857 of it against $1,817.⁠10

Here is our worked example of the 1.5% cap, using AHRQ's $8,285 Hawaii average as the assumed premium. For a full-time employee earning $3,000 a month, the most you can withhold is $45 a month, or $540 a year, which leaves the employer paying about $7,745 for single coverage.⁠7⁠10 At that premium, an employee's share reaches half only at wages of about $23,000 a month, where 1.5% equals half of the $690 monthly premium, so for nearly every worker the employer pays well over half. Budget TDI (below) and comp on top. Of these three, comp is the one where your own record moves the price, through your class assignment, the carrier's multiplier and your experience mod.

Workers’ compensation in Hawaii

Hawaii's Disability Compensation Division administers workers' comp; check its page and HRS chapter 386 for who must carry coverage and who is excluded.

Buying coverage and who sets the rates

NCCI files loss costs only, and each insurer files its own rates, subject to prior approval.⁠4

Latest rate decision (1 Jan 2026): NCCI filed a 4.4% average decrease in voluntary-market loss costs, effective January 1, 2026 (filed August 27, 2025). We could not find the Insurance Division's approval notice online. The previous decision, approved November 27, 2024, cut loss costs 3.5% for January 1, 2025. NCCI's August 27, 2026 filing asks for a further 2.5% decrease effective January 1, 2027 and is still pending. Official notice.

Penalties for going without

Penalties for failing to carry coverage are set in HRS chapter 386; see the Disability Compensation Division page linked above.

What Hawaii employers pay

Employer workers’ compensation costs per $100 of covered wages, 2019–2023
YearHawaiiUnited States
2019$1.57$1.17
2020$1.60$1.08
2021$1.59$1.01
2022$1.62$1.00
2023$1.62$0.98

Employer cost per $100 of covered wages: premiums paid by insured employers plus benefits and administrative costs of self-insured employers, divided by the wages of workers covered by workers’ compensation. The United States figure is NASI’s national total, which includes federal programs. Source: National Academy of Social Insurance (NASI), published 11 Aug 2026.

Oregon’s biennial comparison of workers’ comp rates puts Hawaii’s index for rates in effect on 1 January 2024 at $2.52 per $100 of payroll, 131% above the national median of $1.09 (rank 1 of 51, where 1 is the most expensive). The index prices the same 50 risk classes, weighted by Oregon payroll, in every state, so it compares rate levels rather than what employers actually pay. Compare every state.

Disability and paid leave insurance

Hawaii runs a payroll-funded program that employers must register for, fund or insure on top of workers’ compensation.

Hawaii disability and paid leave programs, 2026
Program2026 contributionEmployer’s part
Temporary Disability Insurance (TDI)No state rate; the employer buys an insured plan or gets approval to self-insure. Employees may be charged up to 0.5% of weekly wages, capped at $7.50 a week in 2026 (wage base $1,500.21).⁠5⁠6Pays the full cost, or at least half with the employee paying the rest up to the 0.5% cap. The employer pays anything above the cap.⁠5⁠6

Statutory plans pay 58% of average weekly wages from the eighth day of disability for up to 26 weeks, up to $871 a week in 2026. Hawaii has no state paid family leave insurance program.

Employer health insurance in Hawaii

Average annual premium per enrolled employee at private-sector employers, 2025
MeasureHawaiiFirms under 50United States
Single coverage, total premium$8,285$8,372$9,025
Family coverage, total premium$23,603$25,498$26,281
Employee share, single$857–$1,817
Employers offering coverage75.5%67.6%49.2%

Average total annual premium per enrolled employee at private-sector establishments that offer health insurance; the offer rate is the share of establishments offering coverage. Small firms have fewer than 50 employees. Source: Agency for Healthcare Research and Quality (AHRQ), Center for Financing, Access and Cost Trends, 2025 survey year. All states.

Commercial auto in Hawaii

Every vehicle registered in Hawaii, including business vehicles, must carry at least 40/80/20 in liability limits (bodily injury per person / per accident / property damage, in thousands of dollars). Official source.

Raised from 20/40/10 for new and renewal policies effective on or after Jan. 1, 2026. No-fault state: at least $10,000 of personal injury protection is also required. The Insurance Division's FAQ describes the change for personal auto policies.

Trucks and buses used in interstate commerce must also meet federal minimums of $750,000 to $5 million: see commercial auto minimums and what commercial auto costs.

Other Hawaii rules that affect insurance costs

Prepaid Health Care Act

Health coverage is mandatory, not optional, for employees who work 20 or more hours a week and earn at least $1,387 a month in 2026.⁠5⁠7 The plan must be approved by the Department of Labor and Industrial Relations, either a plan bought from a Hawaii health care contractor or one the employer submits or self-funds. Employees can withhold at most half the premium, and no more than 1.5% of wages; the employer pays the rest. Employees with other qualifying coverage, such as their own health insurance policy or a federal or state plan, can waive it by filing Form HC-5 every calendar year.⁠7

Hurricane and condominium property

In its report on 2024, the Insurance Division said many condominium master policies were being written in the surplus lines market. It also reported larger than typical increases for both personal and commercial hurricane coverage.⁠3

Sources

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National figures: NASI (employer comp costs), Oregon DCBS (rate index), AHRQ MEPS-IC (health premiums).

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Other states

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