A law enacted in Hawai'i in 1974 that requires employers to provide health insurance for employees working at least 20 hours a week is being cited by researchers who are skeptical of similar mandates being suggested in the argument for universal health care.

The result of Hawai'i's Prepaid Health Care Act has been that businesses have relied more on employees who work fewer than 20 hours a week and thus aren't covered under the requirement, wrote San Francisco Federal Reserve Bank research adviser Rob Valletta and co-authors Tom Buchmueller and John DiNardo, both University of Michigan professors.

The results of the research into health insurance coverage in Hawai'i "imply that an employer mandate is not an effective means for achieving universal coverage," they wrote.

"Although overall insurance coverage rates are unusually high in Hawai'i, a substantial number of people remain uninsured, suggesting a need for alternative approaches if universal coverage is the ultimate goal," they said.

Legislative proposals in both houses of Congress would expand health insurance coverage to 46 million Americans who are now uninsured, in part by requiring businesses to provide coverage or pay subsidies for such a benefit.

President Obama has largely left to Congress the task of crafting universal healthcare, while saying he wants to sign such a measure into law by October.

The percentage of Americans who receive health insurance through their employer or that of a family member has dropped to 59 percent in 2007 from 64 percent in 2000, according to the Fed paper released yesterday.

The focus on health care is unusual because previous papers from the San Francisco Fed released during the past two months have focused on the economy or monetary policy.

Under the Prepaid Health Care Act, companies are required to provide health insurance for employers working at least 20 hours a week for four consecutive weeks. A number of groups are exempt from the law, including government workers, seasonal employees, real estate agents paid solely on commission, and workers who receive health care benefits through collective bargaining agreements, according to a report from the Hawaii Institute for Public Affairs.

The Prepaid Health Care Act came into being in 1974, shortly before the federal Employee Retirement Income Security Act, or ERISA, which set uniform standards for employee benefits.

ERISA does not require health care insurance for employees.

Hawai'i asked Congress for, and secured, an exemption to ERISA.