The board of the state’s financially troubled health exchange has approved a plan to shut down the small business side of the exchange and transition individual users to the federal marketplace.

The board unanimously approved the plan in a vote on Friday.

There are 37,952 people enrolled in health care through the exchange, which is part of President Barack Obama’s Affordable Care Act.

Under the new plan, businesses offering their employees coverage through the exchange would buy plans directly from insurers instead, said Jeff Kissel, CEO of the Hawaii Health Connector. Individual users will have to re-enroll using the website healthcare.gov. Those changes would happen during the next enrollment period in the fall.

Hawaii’s health exchange will transition to become a federally supported state-based marketplace, Kissel said. The state will join Nevada, New Mexico and Oregon, which have similar setups.

The Affordable Care Act required all state-based marketplaces, such as Hawaii, to be financially sustainable by the beginning of 2015. The Connector had a plan to reach sustainability within several years, but the plan relied on continuous state support, and the Legislature granted less funding than what the exchange had requested to be sustainable this year.

"We just don’t have enough uninsured people, thank goodness, to make this financially feasible. That is the bottom line," said Laurel Johnston, deputy chief of staff for Gov. David Ige, at the board meeting. "This is not a failure, this was maybe an experiment that for Hawaii didn’t quite pan out."

The federal government has been withholding approximately $70 million in grant money, but that will likely be released thanks to the board’s vote, which will enable the exchange to continue doing outreach, Kissel said.