State SealARIZONA HOUSE OF REPRESENTATIVES

 

HB 2376: requirements; association health plans

S/E: same subject

PRIME SPONSOR: Representative Barto, LD 15

BILL STATUS: Health and Human Services

                               

 

Summary of the strike-everything amendment to HB 2376

Overview

☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteAdds a new Article to Title 20 regarding Association Health Plans (AHP).

History

An AHP is a health plan that is sponsored by a group or association of employers in order to provide healthcare coverage for their employees. The United States Department of Labor issued a final rule effective August 20, 2018 that establishes criteria under the Employee Retirement Income Security Act (ERISA) for determining when employers may join together in a group or association of employers that will be treated as the employer sponsor of a single multiple-employer "employer welfare benefit plan" and "group health plan".

A.R.S. § 20-2324 requires every association that qualifies as a bona fide association to file a statement with the Director of the Department of Insurance (DOI) that certifies that the association: has been in active existence for at least five years; 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; has a constitution and bylaws; insures at least 25 members, employees or employees of members of the association for the benefit of persons other than the association or its officers or trustees; 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; and 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.

A.R.S. § 20-2301 defines a small employer as an employer who employs at least two but not more than fifty eligible employees on a typical business day during any one calendar year.

Provisions

1.       Requires an AHP that forms for the purpose of offering a health plan to the employees, including working owners, of its employer members must meet the primary purpose, commonality and nondiscrimination standards and requirement of 29 CFR Part 2510. (Sec. 1)

2.       States that in determining group size, the employees, including working owners, of participating employers in the AHP must be counted in the aggregate.  (Sec. 1)

3.       Provides that a self-insured AHP that operates in this state:

a.       At all times must be in compliance with federal law and regulations;

b.       Must be governed and operated in accordance with sound actuarial principles;

c.        Is subject to Chapter 2, Article 6 of Title 20, relating to unfair practices and frauds; and

d.       Is otherwise not subject to the requirements of Title 20. (Sec. 1)

4.       Specifies that for the purpose of an AHP employer includes a small employer. (Sec. 1)

5.       Requires an insurer that issues a health plan to an AHP to notify the Arizona Department of Insurance (DOI) at the time the issuer submits policy form filings. (Sec. 1)

6.       States that on or before January 1, 2020, DOI must post information on their website that summarizes the applicable state law and any other pertinent information related to AHPs.  (Sec. 2)

7.       Defines association health plan, self-insured association health plan, small employer and working owner. (Sec. 1)

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11.   Fifty-fourth Legislature                       HB 2376

12.   First Regular Session                            Version 1: Health and Human Services

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