The coronavirus pandemic has brought unprecedented challenges to Hawaii businesses, including how to provide health insurance for employees when many have been forced to close down for an uncertain period of time.

In a recent memo, state Insurance Commissioner Colin Hayashida encouraged insurers to offer continuing coverage during the COVID-19 crisis.

“The anticipated negative impact on individuals and businesses in this state due to COVID-19 will be realized in the near future,” said Hayashida in the memo. “Business will have substantially reduced revenue, employees will have reduced hours and may lose their jobs, with further-reaching repercussions.”

Hayashida encouraged insurers to be “mindful of the difficulties individuals and businesses” in the state are experiencing.

In addition, the commissioner encouraged insurers to ensure that policies do not lapse and to refrain from canceling or not renewing policies due to nonpayment during this time of hardship.

He also encouraged insurers to grant a grace period for premium payments, to work on a structured payment plan, waive late fees and penalties, and continue working with businesses for a “period of 60 days after this health emergency has passed, or as long as reasonably practical.”

Kaiser Permanente has informed its members it will not terminate health coverage for nonpayments through the month of April.

“We know that many of our friends and neighbors face economic uncertainty during this unprecedented time,” said Ron Vance, president Kaiser Foundation Health Plan and Hospitals, Hawaii Region, in a statement. “We feel the pain of those affected and want to make sure they’re able to focus on taking care of their families and not on the cost of their care.”

Having been part of the Hawaii community for more than 60 years, Kaiser said it was important “to stand together” and that it would evaluate the situation again after the end of the month.

HMSA said it would heed Hayashida’s message.

“HMSA is committed to following the guidance issued by the state’s Insurance Commissioner, which encourages insurers to work with their insureds to continue coverage during this time and ensure policies do not lapse,” said Christine Hirasa, vice president of communications, in a statement.

“If anyone has a hard time making a payment, they should contact HMSA, and we will work with them to find an appropriate solution and ensure that access is available for their health care needs.”

Hawaii Dental Service has, to date, made no special arrangements in response to COVID-19, but many dentists are postponing nonemergency appointments as part of a nationwide effort to flatten the curve of the virus’ spread.

Under the Prepaid Health Care Act of 1974, Hawaii employers are required to provide health care coverage for eligible employees who work 20 hours or more after four consecutive weeks of employment. Furloughed employees generally continue to receive health insurance benefits, but laid-off workers do not.

Many businesses in Hawaii are suddenly dealing with a massive revenue shock and the need to cut costs to avoid bankruptcy, according to Ben Godsey, CEO of ProService Hawaii, a human resources and payroll services provider. With no revenue coming in, they are faced with the dilemma of how to control costs, including via layoffs, furloughs, reduced work hours and wages.

“It is completely unprecedented,” he said. “This is a steeper decline than anyone has ever seen at any time.”

It has hit employers in industries across the board, Godsey said, from doctors and dentists to retailers, tour operators, restaurants and entertainers.

“Every employer, every small business is suffering right now,” he said, “but also finding ways to make the best decisions possible when there are no good decisions.”

Some have found ways to extend benefits, and some have even opted to continue providing health insurance for laid-off employees, an option ProService Hawaii offers.

“It’s a way the employer is able to maintain that benefit and connection in case they bring that employee back,” he said.

Longtime Hawaii retailer Jams World was forced to close its six stores, including one at Ala Moana Center, and to halt all apparel manufacturing in its Kalihi factory in March.

Stores will be closed through at least April 30, according to retail and marketing director Lei Rowan. In late March, Jams World furloughed about 50 store employees, she said, which was unprecedented and very difficult.

The retailer has moved to online sales, for now, and has begun manufacturing and donating face masks to help alleviate the shortage in the isles.

“When our stores closed, that was the hardest hit,” she said. “We don’t know how long this is going on.”

The company is still providing health insurance for about 20 employees, but would appreciate a grace period because it hopes to bring back employees when stores reopen.

“We’d love a break,” she said. “We would be grateful if they can work with us. …. We’ve been open more than 55 years, and never experienced something like this.”

Given the choice between continuing takeout operations and paying for health care premiums for employees at Koko Head Cafe in Kaimuki, chef Lee Ann Wong said she and restaurateur Kevin Hanney opted for the latter.

In an Instagram post, Wong thanked supporters but said they decided to temporarily shutter the restaurant.

“When faced with the choice of continuing to drain our cash reserves by staying open for takeout or paying our employees health care for another month, it wasn’t a hard decision,” she wrote. “These are the realities that most small businesses are facing right now.”

To raise money to help staff pay their bills, the restaurant manager launched a GoFundMe campaign by offering perks to be redeemed by customers upon reopening.