The federal government is threatening to take over Hawaii’s health insurance exchange within months and has restricted grant money to support operations of the Hawaii Health Connector.

Jeff Kissel, the Connector’s executive director, told lawmakers at a briefing Thursday that if the exchange created by the Affordable Care Act does not get state funding soon, the federal government will abolish Hawaii’s marketplace and run it directly.

“The federal government recently has made it clear that they need time to migrate these functions if the state is not going to support them, so they put a little more pressure on us,” he said. “They want to see a sustainable state-based marketplace in Hawaii for open enrollment 2016, which commences November 2015.”

State officials are worried that if the federal government takes over exchange operations, Hawaii’s 1974 Prepaid Health Care Act, requiring employers provide health insurance for employees working more than 20 hours per week, will be abolished and more people will become uninsured.

Kissel said the Connector needs $9 million to $10 million in additional funding from the state in fiscal 2016, starting July 1, to continue operations.