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ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
House: COM DPA 8-1-2-0 | Third Read 40-17-3-0-0Senate: FIN DPA 5-1-1-0 | Third Read 19-9-2-0-0 |
HB 2693: insurance; bona fide associations; qualifications
Sponsor: Representative Livingston, LD 28
Senate Engrossed
Overview
Makes revisions to qualify as a bona fide association.
History
Statute outlines the qualifications for an association to qualify as a path 1 and path 2 bona fide association. If the association meets federal requirements governing the definition of employer for purposes of establishing group health plans, the association qualifies as a path 2 bona fide association (A.R.S. § 20-2324).
The Employee Retirement Income Security Act (ERISA) regulates employee benefit plans, including private-sector job-based retirement plans, health plans, and other welfare benefit plans. Section 3(5) of ERISA defined the employer to include "any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan; and includes a group or association of employers acting for an employer in such capacity."
The U.S. Department of Labor adopted the 2018 AHP Rule, which established alternative criteria under ERISA section 3(5) for determining when employers may join together in a group that could be treated as the "employer" sponsor of a single multiple employer group health plan. The Department has since rescinded the 2018 AHP Rule.
Provisions
1. Removes the classification of and requirements for a path 2 bona fide association. (Sec. 1)
2. Stipulates, as an alternative qualification as a bona fide association, an association that meets the requirements of an employer as defined by federal law qualifies as a bona fide association. (Sec. 1)
3. Restates that the bona fide association requirements do not limit or prohibit the operation of a self-funded multiple employer welfare arrangement, rather than the issuance of self-funded health benefits plans, through:
a. certain bona fide associations; or
b. a statewide chamber of commerce or a statewide business league that meets outlined criteria. (Sec. 1)
4. Modifies the definition of small employer. (Sec. 1)
Senate Amendments
1. Includes the requirement for the Arizona Department of Administration (ADOA), if monies are available, to conduct a feasibility study on the state employee health insurance plans and the public school districts employee health insurance plans.
2. Delineates requirements for ADOA in conducting the feasibility study.
3. Requires ADOA to submit a report of its findings and recommendations to the Governor, the Secretary of State and certain members of the Legislature by January 1, 2027.
4. Specifies the feasibility study on the state employee and the public school districts health insurance plans does not require the implementation of an individual coverage health reimbursement arrangement or the replacement of an existing health coverage option.
5. Allows ADOA to 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 feasibility study.
6. Repeals the feasibility study requirements on July 1, 2027.
7. Defines individual coverage health reimbursement arrangement.
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Initials PB HB 2693
3/31/2026 Page 0 Senate Engrossed
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