If you run a business by yourself or with one other person, you may have been told that group health coverage is out of reach because you do not have a conventional employee group. A small group with only an owner can be difficult for insurers to handle as a group plan: there is no broader workforce to spread participation across, and the rules may not require an insurer to offer a one-person plan outside an eligible association. Arizona has now created a clearer legal route for some owners to seek coverage through an association.
What Arizona changed
Arizona House Bill 2693, titled “insurance; bona fide associations; qualifications,” amends Arizona Revised Statutes section 20-2324. The governor approved it on June 4, 2026; it was filed on June 5 and took effect in September 2026 under Arizona’s general effective date.
The law creates a “path 2 bona fide association.” In plain English, this is an association that qualifies as an employer under the federal Employee Retirement Income Security Act (ERISA, the federal law governing many employer benefit plans). The association must also meet the applicable federal requirements described in 29 Code of Federal Regulations section 2510.3-5.
The pre-existing path 1 route remains. Among its requirements, a path 1 association must insure at least 25 members, employees, or employees of members. The new path 2 gives qualifying associations another way to meet the bona fide association definition.
The law also recognizes a statewide chamber of commerce or statewide business league route. The organization must have a constitution or bylaws, have been organized and maintained in good faith for five continuous years for purposes other than providing or obtaining insurance, and be exempt from federal tax under section 501(c)(6) of the Internal Revenue Code.
Through an eligible association, an insurer may offer health benefits plans to a small employer group of one, which may include a sole proprietor or working owner. Importantly, an insurer that elects to offer association coverage to groups of one is not required to make plans available under section 20-2304(A) to one-person groups that are not seeking coverage through a bona fide association. This creates a route; it does not require every insurer to offer one-person coverage.
Read the enacted text of HB 2693.
Who may qualify as a working owner?
The definitions are practical, but they are specific. A “working owner” must meet the requirements below, and a responsible plan fiduciary must reasonably determine that the person qualifies.
- You have an ownership interest. You must have an ownership right of any nature in a trade or business. The definition includes partners and other self-employed individuals.
- You earn income for personal services. You must receive wages or self-employment income from that business for providing personal services to it.
- You meet one of two activity or income tests. Either you work an average of at least 20 hours per week or 80 hours per month providing personal services to the business, or your wages or self-employment income from the business are at least equal to the cost of your coverage and any covered beneficiaries in the association-sponsored group plan.
A “sole proprietor” has a narrower definition: a working owner who owns a business and does not operate it using any type of entity. If your business operates through an entity, do not assume that the sole-proprietor definition applies. You may still want to ask whether the separate working-owner definition is relevant to your situation.
For association plans, the statute’s small-employer definition includes an employer with at least one and no more than 50 eligible employees on a typical business day during any one calendar year. The law also specifically recognizes that a group of one may include a sole proprietor or working owner.
Why the new route matters commercially
The change is about access to a different coverage structure. When an eligible association brings businesses together, a one-person business may be able to seek coverage as part of an association-based group arrangement rather than only as an individual shopper.
That can change the pricing dynamics compared with shopping in the individual market, because the arrangement and risk pool are different. But a group-of-one route does not automatically mean a “large-group” plan, lower premiums, or a particular level of benefits. Available plans and costs depend on the arrangement, the insurer’s participation, plan terms, underwriting where applicable, and state rules.
That is why it is important to compare the actual coverage, not just the label. Review the plan’s benefits, costs, provider access, and conditions before deciding whether it fits your needs.
How MEWAs fit into the picture
A multiple employer welfare arrangement (MEWA) is a benefit arrangement that provides coverage to employees of two or more employers. Arizona’s law does not limit or prohibit a self-funded MEWA operating in the state through a bona fide association established and operated in compliance with ERISA. It also addresses self-funded MEWA operation through qualifying statewide chambers of commerce and statewide business leagues.
This is relevant to owners who need a way to participate in a broader arrangement even though their own business has few or no employees. We represent Ameristead for self-employed people, gig workers, entrepreneurs, and small groups. Ameristead coverage requires medical underwriting, so acceptance is not guaranteed and underwriting rules apply.
Is your state next?
Arizona’s law is a specific state-level change, not a nationwide rule. Most states have not made this same change, and the rules differ by state. We cannot predict whether another state will adopt a similar approach; this is simply the kind of development worth watching for where you live.
If you are outside Arizona, ask whether your state permits one-person groups to obtain small-group coverage through an association or statewide business organization. Ask what legal qualifications the association must meet, whether coverage is insured or self-funded, and whether medical underwriting applies. A “group of one” answer can depend on the state law and the exact structure, so get the details before relying on a general statement.
Arizona’s HB 2693 also directs the Department of Administration to study whether individual coverage health reimbursement arrangements could work for state and public school district employee health plans. A report is due to the governor and legislative leadership on or before January 1, 2027. That study is a separate provision; it does not itself require those arrangements to be implemented.
Three steps to take now
- Confirm how your business is organized. Find out whether you operate as a sole proprietor or through an entity.
- Gather proof of your work and income. Collect records that show your self-employment income and the hours you provide personal services to the business.
- Ask about the available route. Find out whether a group-of-one option through a bona fide association or MEWA is available to you, and ask what eligibility, underwriting, and plan rules apply.
Get help reviewing your options
At Total Benefit Solutions, we help you work through confusing insurance rules and compare possible paths. Our advocacy is free to you. There is no cost to the reader for our help assessing whether an association or MEWA route may fit. Coverage availability, eligibility, underwriting, and state rules still apply.
Call us at (215) 355-2121 or visit www.totalbenefits.net to discuss your situation. You can also contact our team.
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