It's time for our lawmakers to bite the bullet and do something they were told they couldn't.

Next year marks the 35th anniversary of Hawai'i's Prepaid Health Care Act of 1974. It was created as a protection against the "cost of medical care in case of sudden need (that) may consume all or an excessive part of a person's resources." (Medical emergencies are a leading cause of bankruptcy today.)

The act mandates employers to provide healthcare to employees working 20 hours or more per week. It must include certain basic hospital, surgical, medical, diagnostic, therapeutic and maternity benefits. No discrimination based on preexisting conditions is allowed. Employee contributions would be capped at 1.5 percent of gross income, an amount that, theoretically, would adjust proportionally with inflation.

The act is the only one of its kind in the United States, partly because of the foresight of its designers, and partly because of a fluke of timing.

In that same year the federal government passed the Employee Retirement Income Security Act of 1974. The federal law was designed primarily to protect interstate commerce with regard to pension plans and health benefits. The law does not mandate these benefits; it merely regulates the operation of said plans if an employer establishes one.

Here's the catch: ERISA preempts all state laws related to employee benefits. This has tied the hands of many states who want to create similar mandates. Hawai'i was fortunate in that its Prepaid Health Care Act was passed just months before ERISA — as a result, an amendment was added to ERISA allowing the exclusive waiving of the preemption. The exception, however, would not apply to "any amendment to the Hawai'i Act enacted after September 2, 1974."

In other words, Hawai'i could keep its law but it was not allowed to make any significant changes to it.

The Prepaid Health Care Act may not have changed, but everything else has.

Reagan-era deregulation. Revolutionary innovations in expensive medical technologies. An aging baby boomer population. Healthcare expenditures have risen well ahead of inflation, from 7.2 percent of GDP in 1970 to 16 percent of GDP in 2005.

As a result of the 1.5 percent contribution cap, Hawai'i's employees have been spared many of the hardships suffered by employees elsewhere. Unfortunately, Hawai'i's businesses have been left to shoulder the difference.

And matters are getting worse. As with the rest of the country, Hawai'i faces an economic crisis as well as a healthcare crisis, problems that are exacerbated due to geography. Higher costs and drastically lower tourism traffic has resulted in a spiral of underemployment, unemployment, business closures and bankruptcies that promise to continue into the coming months or years.

Many of the solutions to Hawai'i's problems could possibly come in the form of a national healthcare initiative via the Obama administration, but it will most likely be years before we see any benefit here, or what form that will take. So what is our call to action now? There are two possibilities.

The first would be to lobby for a further exception to the ERISA law. This would allow us to do some long-needed fine tuning, perhaps in the form of a cap adjustment accompanied by an increase in penalties for noncompliance (currently only $1 per day of noncompliance per employee).

This penalty increase is advisable since the cost of providing healthcare is now greater than the cost of not providing healthcare. Downside: Weakening a law meant to protect employees is a slippery slope we should approach with caution.

The second option is for our politicians to insert themselves into the national healthcare process, thus forming the new law in a way that complements or even mirrors our own Prepaid Health Care Act. With a Democratic majority and a sympathetic ear in the White House this could well bear fruit. Downside: It could be years before we see the benefits of this plan.

Three things are certain: The Prepaid Health Care Act has been a great thing for Hawai'i, and if expanded could be great thing for the country. Our businesses need help, not just for their own welfare but for the welfare of the Hawaiian economy and the Hawaiian workforce; and 35 years is too long to be doing nothing.

Ronald D. Rodriguez resides in Honolulu and works in reservations at Starwood Hotels. He wrote this commentary for The Advertiser.