Arizona Gov. Katie Hobbs just signed legislation that has the potential to ignite a major shift in how the state offers health insurance for its workers.
Introduced by Republican state Rep. David Livingston and signed by the governor June 4, House Bill 2693 calls for the Arizona Department of Administration to conduct a feasibility study for individual coverage health reimbursement arrangements.
The study aims to unpack whether ICHRAs could help with budget stability, employer contribution predictability and employee choice. It would evaluate state and national data to assess whether ICHRAs could be a fit for state and public school employee health plans. The department would review coverage options, costs, utilization, enrollment trends and administrative effects. ICHRAs would be compared against other health plan options.
The department will also channel feedback from school districts, benefits administrators, consumer advocates, insurers and employees. While gauging feasibility, the department will determine considerations for implementation.
A report for the governor and lawmakers is due Jan. 1, 2027. While the law does not set a requirement for establishing ICHRAs, nor replacing existing health coverage options, it does test ICHRA’s waters and lay a foundation for future changes.
Oscar Health said its state government affairs director, Brooke Tiner, contributed to the bill.
“Stable benefits budgets matter. Real employee choice matters. That’s why Arizona just took a meaningful step toward learning what ICHRA could unlock for public-sector coverage,” Oscar Health said on LinkedIn.
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