Bill to expand market-based health coverage option for small businesses advances

Legislation aimed at expanding affordable health coverage options for Arizona’s small businesses is moving forward at the Capitol.

House Bill 2693, sponsored by Rep. David Livingston (R-Peoria), passed the House Commerce Committee on January 27 with support from the Arizona Chamber of Commerce & Industry and the Arizona Small Business Association.

HB 2693 expands access to Mutual Employer Welfare Arrangements (MEWAs), a long-standing, regulated option under Arizona law that allows employers to pool together to offer health benefits.

Under current statute, participation in MEWAs is limited. The bill broadens eligibility so that more small employers can participate through a statewide chamber of commerce or business association, providing greater flexibility and purchasing power without adding new regulatory requirements.

Supporters say the bill addresses a persistent challenge facing small businesses: higher healthcare costs and fewer coverage options compared to large employers.

“Small businesses are the backbone of Arizona’s economy, but they often face a healthcare market that wasn’t designed with them in mind,” said Courtney Coolidge, executive vice president of the Arizona Chamber of Commerce & Industry. “HB 2693 is a practical, employer-led solution that helps level the playing field by expanding access to affordable, flexible health coverage options while preserving strong regulatory oversight.”

Livingston, the bill sponsor, agreed, testifying in the committee hearing that the bill allows small businesses “to come together in an association and buy health insurance like a big employer.” Bigger numbers in an insurance pool, he said, lead to lower overall costs for businesses.

State Rep. Jeff Weninger (R-Chandler) an independent restaurateur who chairs the Commerce Committee, said he’s experienced the challenges of trying to offer employee health coverage.

“As a small business owner, restaurants especially, the health care costs go up every year, and more independent restaurants, who still may have 80-100 employees, don’t have the buying power of these large corporations,” he said.

How the proposal works

MEWAs allow multiple employers to band together to spread risk across a broader group, which can help stabilize costs and lower premiums. HB 2693 clarifies and expands state law to allow a statewide chamber of commerce or statewide business league to sponsor a MEWA, enabling employers from different industries to participate voluntarily while retaining control over whether and how they offer coverage to their employees.

This market-based approach to health care coverage builds on models already permitted in many other states. By increasing the size and diversity of the risk pool, proponents argue the bill can deliver greater choice, improved stability, and cost savings for small employers and their workers.

Next steps

With approval from the House Commerce Committee, HB 2693 must next clear the House Rules Committee and be reviewed by each party caucus before advancing to a vote of the full House. If approved, the measure would represent a significant policy change aimed at improving healthcare affordability and competitiveness for Arizona’s small-business community.

Business groups backing the legislation say they will continue working with lawmakers in both parties as the bill moves through the legislative process.