Arizona Laws 20-2324. Bona fide associations; definitions
A. An association qualifies as a path 1 bona fide association if the association meets the following requirements:
Terms Used In Arizona Laws 20-2324
- Accountable health plan: means an entity that offers, issues or otherwise provides a health benefits plan and that is approved by the director as an accountable health plan pursuant to section 20-2303. See Arizona Laws 20-2301
- Bona fide association: means , for a health benefits plan issued by an accountable health plan, an association that meets the requirements of section 20-2324. See Arizona Laws 20-2301
- department: means the department of insurance and financial institutions. See Arizona Laws 20-101
- Dependent: A person dependent for support upon another.
- employee: includes the employees of the employer and the individual proprietor or self-employed person if the employer is an individual proprietor or self-employed person. See Arizona Laws 20-2301
- Fiduciary: A trustee, executor, or administrator.
- Health benefits plan: means a hospital and medical service corporation policy or certificate, a health care services organization contract, a group disability policy, a certificate of insurance of a group disability policy that is not issued in this state, a multiple employer welfare arrangement or any other arrangement under which health services or health benefits are provided to two or more individuals. See Arizona Laws 20-2301
- Health status-related factor: means any factor in relation to the health of the individual or a dependent of the individual enrolled or to be enrolled in an accountable health plan, including:
(a) Health status. See Arizona Laws 20-2301
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Month: means a calendar month unless otherwise expressed. See Arizona Laws 1-215
- Person: includes a corporation, company, partnership, firm, association or society, as well as a natural person. See Arizona Laws 1-215
- Small employer: means an employer who employs at least two but not more than fifty eligible employees on a typical business day during any one calendar year. See Arizona Laws 20-2301
1. 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. Has a constitution and bylaws.
3. 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. 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. 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. 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. An association qualifies as a path 2 bona fide association if the association meets the requirements of 29 C.F.R. § 2510.3-5. 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. 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. 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. This section does not limit or prohibit the issuance of self-funded health benefits plans in this state through a bona fide association if the association is established and operating in compliance with applicable provisions of the employee retirement income security act of 1974. 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 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. "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, a sole proprietor or working owner.
3. "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. "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.