Shown verbatim: the complete text as captured from the official page posted by the Arizona Legislature, fetched 2026-08-28. Where this bill amends existing law, language marked for deletion in the official page appears here in brackets. This is the chaptered version. The official bill page.
Senate Engrossed House Bill insurance; bona fide associations; qualifications State of Arizona House of Representatives Fifty-seventh Legislature Second Regular Session 2026 HOUSE BILL 2693 AN ACT amending section 20-2324, arizona revised statutes; relating to accountable health plans. (TEXT OF BILL BEGINS ON NEXT PAGE) Be it enacted by the Legislature of the State of Arizona: Section 1. Section 20-2324, Arizona Revised Statutes, is amended to read: START_STATUTE20-2324. Bona fide associations; definitions A. An association qualifies as a [path 1] bona fide association if the association either: 1. Meets the following requirements: [1.] (a) Has been formed and maintained in good faith for purposes other than obtaining insurance and does not condition membership in the association on the purchase of insurance that is sponsored by the association. [2.] (b) Has a constitution and bylaws. [3.] (c) Insures at least twenty-five members, employees or employees of members of the association for the benefit of persons other than the association or its officers or trustees. [4.] (d) Does not condition membership in the association on any health status-related factor relating to an individual, including an employee of an employer or a dependent of an employee, and clearly states this in all membership and application materials. [5.] (e) Makes health benefits plans offered through the association available to all members regardless of any health status-related factor relating to any member of the association or individual eligible for coverage through a member and clearly states this in all membership and application materials. [6.] (f) Does not make health benefits plans offered through the association available other than in connection with a member of the association and clearly states this in all membership and application materials. [B.] 2. An association qualifies as a path 2 bona fide association If the association Meets the requirements of [29 Code of Federal Regulations section 2510.3-5] an employer as defined in the employee retirement income security act of 1974 (P.L. 93-406; 88 Stat. 829; 29 United States Code section 1002). An insurer electing to offer health benefits plans through a bona fide association to small employer groups of one, which may include sole proprietors or working owners, is not required to make health benefits plans available under section 20-2304, subsection A to small employer groups of one if the small employer is not seeking a health benefits plan through a bona fide association. [C.] B. The requirements of section 20-2304, subsection A do not apply to health benefits plans offered by an accountable health plan if the accountable health plan makes this coverage available in the small group market only through one or more [path 1] bona fide associations. [D.] C. The department may survey insurers issuing health benefits plans to determine the number of health benefits plans issued to bona fide associations in this state each year. [E.] D. This section does not limit or prohibit the [issuance] operation of a self-funded health benefits plans multiple employer welfare arrangement in this state through any of the following: 1. A bona fide association if the bona fide association is established and operating in compliance with applicable provisions of the employee retirement income security act of 1974. 2. A statewide chamber of commerce or a statewide business league that meets all of the following criteria: (a) The statewide chamber of commerce or the statewide business league has a constitution or bylaws. (b) The statewide chamber of commerce or the statewide business league was organized and has been maintained in good faith for a continuous five-year period for purposes other than providing for or obtaining insurance. (c) The statewide chamber of commerce or statewide business league is exempt from federal taxation pursuant to section 501(c)(6) of the internal revenue code. E. The department retains the authority to investigate whether an association is unlawfully transacting insurance in violation of this title. F. For the purposes of subsection A, paragraph 1 of this section, "employees" includes retired employees. G. For the purposes of this section: [1. "Bona fide association" includes path 1 bona fide associations and path 2 bona fide associations.] [2.] 1. "Small employer" includes, if an insurer elects to issue coverage to small employer groups of one: (a) For health benefits plans issued through a bona fide association, an employer who employs at least one but not more than fifty eligible employees on a typical business day during any one calendar year. (b) For health benefits plans issued through a path 2 bona fide association statewide chamber of commerce or a statewide business league, a sole proprietor or working owner. [3.] 2. "Sole proprietor" means a person who is a working owner, who owns a business and who does not operate the business using any type of entity. [4.] 3. "Working owner" means a person who a responsible plan fiduciary reasonably determines is an individual who meets all of the following requirements: (a) Has an ownership right of any nature in a trade or business, whether incorporated or unincorporated, including a partner and another self-employed individual. (b) Is earning wages or self-employment income from the trade or business for providing personal services to the trade or business. (c) Either: (i) Works on average at least twenty hours per week or at least eighty hours per month providing personal services to the trade or business. (ii) Has wages or self-employment income from the trade or business that at least equals the working owner's cost of coverage for participation by the working owner and any covered beneficiaries in the group health plan sponsored by the association in which the individual is participating. Sec. 2. Department of administration; health insurance system study; report; delayed repeal; definition A. Subject to available monies, the department of administration shall conduct a feasibility study on the state employee health insurance plans and the public school districts employee health insurance plans in this state. B. The department of administration shall: 1. Review, analyze and consider relevant state and national data for individual coverage health reimbursement arrangements that include: (a) Coverage options. (b) Costs. (c) Utilization. (d) Enrollment trends. (e) Administrative impacts. 2. Ensure greater choice and flexibility for employees. 3. Create cost certainty for employers. 4. Evaluate how an individual coverage health reimbursement arrangement may expand employee choice among health insurance plan options while allowing this state and public school districts to establish a predictable employer contribution and to improve long-term budget stability. 5. Compare individual coverage health reimbursement arrangements with other available coverage options to analyze employee choice, affordability, flexibility, state and school district cost predictability, administrative complexity and short-term and long-term fiscal impacts. 6. Obtain stakeholder feedback and input from all of the following: (a) Employees. (b) Insurers. (c) Benefits administrators. (d) School districts. (e) Consumer advocates. 7. Identify implementation considerations that include all of the following: (a) Administrative requirements. (b) Market impacts. (c) Statutory changes. (d) Budget changes. (e) Regulatory changes, including cost savings. C. On or before January 1, 2027, the department of administration shall submit a report of its findings and recommendations to the governor, the president of the senate, the speaker of the house of representatives, the chairpersons of the health and human services committees in the senate and the house of representatives, the chairperson of the appropriations, transportation and technology committee in the senate and the chairperson of the appropriations committee in the house of representatives and provide a copy of this report to the secretary of state. D. This section does not require the implementation of an individual coverage health reimbursement arrangement or the replacement of an existing health coverage option. E. The department of administration may accept and spend gifts, grants and donations that are provided from public or private sources to conduct or contract with a third-party entity to conduct the study prescribed by this section. F. This section is repealed from and after June 30, 2027. G. For the purposes of this section, "individual coverage health reimbursement arrangement" means a health reimbursement arrangement as prescribed in 45 Code of Federal Regulations section 146.123.
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