AZ Legislative Update – May 9, 2025
Posted by [email protected] on May. 12, 2025 / Subscribe 0
Friday, May 9th, marked the 117th day of the Arizona 57th Legislature, 1st Regular Session. Of the 1,679 bills introduced this year, the Legislature has now passed 351 with Governor Hobbs signing 152 and vetoing 88.
With the budget situation in flux, both legislative chambers had abbreviated schedules this week. The House and Senate plan to take an extended recess while the budget continues to be negotiated. The House adjourned on Wednesday, and they will not be returning until Monday, May 19th. The Senate was only in session for two days (Tuesday & Wednesday) and they will not return to the floor until Wednesday, May 28th. Moving forward, both chambers will likely continue to work sparingly until an agreement is reached on the budget and a Prop. 123 K-12 education funding extension ballot referral.
The Legislature and the Governor are reportedly still nowhere near a deal on a FY 2026 spending package. As we get closer and closer to June, members will begin to feel the pressure to act sooner than later, especially with the fiscal deadline approaching (June 30th). Nevertheless, the process continues to be very fluid, and things could change rather quickly.
Health Insurance
HB 2175 Claims; Prior Authorization; Conduct (Willoughby): HB 2175 passed out of the House on Final Read on Tuesday, 53-1 and is currently awaiting the Governor’s approval. The bill updates to current statutes regarding the denial of claims and prior authorizations by health care insurers. Specifically, it mandates that before a health care insurer can deny a claim based on medical necessity, the medical director must individually review the denial and exercise independent medical judgment, without relying solely on external recommendations. This requirement is similarly applied to direct denials of prior authorizations involving medical necessity. Additionally, the bill introduces new sections to the Arizona Revised Statutes, specifically adding sections 20-3103 and 20-3407, which outline these requirements. The effective date for these changes is set for July 1, 2026.
HB 2332 Postpartum Health; Education; Advisory Committee (Willoughby): HB 2332 passed on Final Read in the House, 44-13, on Wednesday and is currently awaiting the Governor’s approval. The bill would update current statutes by mandating the Department of Health Services (DHS) to compile and disseminate educational materials on maternal mental health conditions, particularly postpartum depression. This includes the establishment of an Advisory Committee on Obstetrics, Gynecology, and Maternal Mental Health in Rural Communities, which will develop recommendations to improve access to health services in underserved areas. The bill requires healthcare institutions to provide these educational materials to new parents upon discharge and to offer them to pregnant women or those exhibiting signs of maternal mental health disorders. Additionally, the bill introduces specific requirements for the composition and duties of the Advisory Committee, including the appointment of various healthcare representatives and a deadline for submitting a report on its findings by December 31, 2026. It also replaces existing language regarding postpartum depression treatment by insurers with a focus on educational outreach, emphasizing awareness and prevention. The Advisory Committee is set to be repealed on July 1, 2027, ensuring a temporary but targeted initiative to enhance maternal mental health resources.
Insurance Operations
HB 2193 Captive Insurers; Certificate of Dormancy (Livingston): HB 2193 was signed by the Governor on Wednesday. The bill proposes several updates to the Arizona Revised Statutes concerning captive insurers. It introduces a new definition for "dormant captive insurer," which refers to a captive insurer that has ceased transacting insurance business and has no outstanding liabilities. The bill also establishes a process for dormant captive insurers to apply for a certificate of dormancy, which must be renewed every five years. Additionally, it sets forth requirements for maintaining capital and surplus, submitting annual financial reports, and the conditions under which a certificate of dormancy may be revoked or surrendered. Furthermore, the bill modifies existing definitions and requirements related to captive insurers, including changes to the terminology used for certain entities, such as "board of managers" instead of "board of directors" for limited liability companies. It also reduces the minimum capital requirement for protected cell captive insurers from $500,000 to $250,000 and specifies that at least one member of the board of managers for limited liability companies must be a resident of Arizona. Overall, these updates aim to streamline the regulatory framework for captive insurers and enhance compliance measures.
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