public monies; genetic sequencing; prohibition

HB2584 - 572R - H Ver

House Engrossed

public monies;
genetic sequencing; prohibition

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HOUSE BILL 2584

AN
ACT

Amending sections 38-651 and 38-651.01, Arizona
Revised Statutes; relating to compensation and insurance.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it
enacted by the Legislature of the State of Arizona:

Section 1. Section 38-651, Arizona Revised
Statutes, is amended to read:

START_STATUTE
38-651.

Expenditure of monies for health and accident insurance;
definitions

A. The department of administration may
expend

spend
public monies appropriated
for
such
that
purpose to procure
health and accident coverage for full-time officers and employees of this
state and its departments and agencies.� The department of administration may
adopt rules that provide that if an employee dies while the employee's
surviving spouse's health insurance is in force, the surviving spouse is
entitled to
no
not
more than thirty-six
months of extended coverage at one hundred two
per cent
percent
of the group rates by paying the
premiums. Except as provided by sections 38-1114 and 38-1141,

no
public monies may
not
be
expended

spent
to pay all or any part of
the premium of health insurance continued in force by the surviving spouse.�
The department of administration shall seek a variety of plans, including
indemnity health insurance, hospital and medical service plans, dental plans and
health maintenance organizations.� On a recommendation of the department of
administration and the review of the joint legislative budget committee, the
department of administration may self-insure for the purposes of this
subsection. If the department of administration self-insures,
the department may contract directly with preferred provider organizations,
physician and hospital networks, indemnity health insurers, hospital and
medical service plans, dental plans and health maintenance organizations.� If
the department self-insures, the department shall provide that the self-insurance
program include all health coverage benefits that are mandated pursuant to
title 20. The self-insurance program shall include provisions to provide
for the protection of the officers and employees, including grievance
procedures for claim or treatment denials, creditable coverage determinations,
dissatisfaction with care and access to care issues. The department
of administration by rule shall designate and adopt performance standards,
including cost competitiveness, utilization review issues, network development
and access, conversion and implementation, report timeliness, quality outcomes
and customer satisfaction for qualifying plans. The qualifying plans
for which the standards are adopted include indemnity health insurance,
hospital and medical service plans, closed panel medical and dental plans and
health maintenance organizations, and for eligibility of officers and employees
to participate in such plans. Any indemnity health insurance or
hospital and medical service plan designated as a qualifying plan by the
department of administration must be open for enrollment to all permanent full-time
state employees, except that any plan established prior to June 6, 1977 may be
continued as a separate plan. Any closed panel medical or dental
plan or health maintenance organization designated as the qualifying plan by
the department of administration must be open for enrollment to all permanent
full-time state employees residing within the geographic area or area to
be served by the plan or organization. Officers and employees may
select coverage under the available options.

B. The department of administration may
expend

spend
public monies appropriated
for
such
that
purpose to procure
health and accident coverage for the dependents of full-time officers and
employees of this state and its departments and agencies. The
department of administration shall seek a variety of plans, including indemnity
health insurance, hospital and medical service plans, dental plans and health
maintenance organizations.� On a recommendation of the department of
administration and the review of the joint legislative budget committee, the
department of administration may self-insure for the purposes of this
subsection. If the department of administration self-insures,
the department may contract directly with preferred provider organizations,
physician and hospital networks, indemnity health insurers, hospital and
medical service plans, dental plans and health maintenance
organizations. If the department self-insures, the department
shall provide that the self-insurance program include all health coverage
benefits that are mandated pursuant to title 20.� The self-insurance
program shall include provisions to provide for the protection of the officers
and employees, including grievance procedures for claim or treatment denials,
creditable coverage determinations, dissatisfaction with care and access to
care issues. The department of administration by rule shall
designate and adopt performance standards, including cost competitiveness,
utilization review issues, network development and access, conversion and
implementation, report timeliness, quality outcomes and customer satisfaction
for qualifying plans. The qualifying plans for which the standards
are adopted include indemnity health insurance, hospital and medical service
plans, closed panel medical and dental plans and health maintenance
organizations, and for eligibility of the dependents of officers and employees
to participate in such plans. Any indemnity health insurance or
hospital and medical service plan designated as a qualifying plan by the
department of administration must be open for enrollment to all permanent full-time
state employees, except that any plan established prior to June 6, 1977 may be
continued as a separate plan. Any closed panel medical or dental
plan or health maintenance organization designated as a qualifying plan by the
department of administration must be open for enrollment to all permanent full-time
state employees residing within the geographic area or area to be served by the
plan or organization.� Officers and employees may select coverage under the
available options.

C. The department of administration may designate
the Arizona health care cost containment system established by title 36,
chapter 29 as a qualifying plan for the provision of health and accident
coverage to full-time state officers and employees and their
dependents. The Arizona health care cost containment system shall
not be the exclusive qualifying plan for health and accident coverage for state
officers and employees either on a statewide or regional basis.

D. Except as provided in section 38-652,
public monies
expended
spent

pursuant to this section each month shall not exceed:

1.
Five hundred dollars

$500
multiplied by the number of officers and employees who
receive individual coverage.

2.
One thousand two hundred dollars
$1,200
multiplied by the number of married couples if both
members of the couple are either officers or employees and each receives
individual coverage or family coverage.

3.
One thousand two hundred dollars

$1,200
multiplied by the number of officers or employees
who receive family coverage if the spouses of the officers or employees are not
officers or employees.

E. Subsection D of this section:

1. Establishes a total maximum expenditure of public
monies pursuant to this section.

2. Does not establish a minimum or maximum
expenditure for each individual officer or employee.

F. In order to ensure that an officer or employee
does not suffer a financial penalty or receive a financial benefit based on the
officer's or employee's age, gender or health status, the department of
administration shall consider implementing the following:

1. Requests for proposals for health insurance that
specify that the carrier's proposed premiums for each plan be based on the
expected age, gender and health status of the entire pool of employees and
officers and their family members enrolled in all qualifying plans and not on
the age, gender or health status of the individuals expected to enroll in the
particular plan for which the premium is proposed.

2. Recommendations from a legislatively established
study group on risk adjustments relating to a system for reallocating premium
revenues among the contracting qualifying plans to the extent necessary to
adjust the revenues received by any carrier to reflect differences between the
average age, gender and health status of the enrollees in that carrier's plan
or plans and the average age, gender and health status of all enrollees in all
qualifying plans.

G. Each officer or employee shall certify on the
initial application for family coverage that the officer or employee is not
receiving more than the contribution for which eligible pursuant to subsection
D of this section. Each officer or employee shall also provide the
certification on any change of coverage or marital status.

H. If a qualifying health maintenance organization
is not available to an officer or employee within fifty miles of the officer's
or employee's residence and the officer or employee is enrolled in a qualifying
plan, the officer or employee shall be offered the opportunity to enroll with a
health maintenance organization when the option becomes
available. If a health maintenance organization is available within
fifty miles and it is determined by the department of administration that there
is an insufficient number of medical providers in the organization, the
department may provide for a change in enrollment from plans designated by the
director when additional medical providers join the organization.

I. Notwithstanding subsection H of this section,
officers and employees who enroll in a qualifying plan and reside outside the
area of a qualifying health maintenance organization shall be offered the
option to enroll with a qualified health maintenance organization offered
through their provider under the same premiums as if they lived within the area
boundaries of the qualified health maintenance organization, if:

1. All medical services are rendered and received at
an office designated by the qualifying health maintenance organization or at a
facility referred by the health maintenance organization.

2. All nonemergency or nonurgent travel, ambulatory
and other expenses from the residence area of the officer or employee to the
designated office of the qualifying health maintenance organization or the
facility referred by the health maintenance organization are the responsibility
of and at the expense of the officer or employee.

3. All emergency or urgent travel, ambulatory and
other expenses from the residence area of the officer or employee to the
designated office of the qualifying health maintenance organization or the
facility referred by the health maintenance organization are paid pursuant to
any agreement between the health maintenance organization and the officer or
employee living outside the area of the qualifying health maintenance
organization.

J. The department of administration shall allow any
school district in this state that meets the requirements of section 15-388,
a charter school in this state that meets the requirements of section 15-187.01
or a city, town, county, community college district, special taxing district,
authority or public entity organized pursuant to the laws of this state that
meets the requirements of section 38-656 to participate in the health and
accident coverage prescribed in this section, except that participation is only
allowed in a health plan that is offered by the department and that is subject
to title 20, chapter 1, article 1. A school district, a charter
school, a city, a town, a county, a community college district, a special
taxing district, an authority or any public entity organized pursuant to the
laws of this state rather than this state shall pay directly to the benefits
provider the premium for its employees.

K. The department of administration shall determine
the actual administrative and operational costs associated with school
districts, charter schools, cities, towns, counties, community college
districts, special taxing districts, authorities and public entities organized
pursuant to the laws of this state participating in the state health and
accident insurance coverage. These costs shall be allocated to each
school district, charter school, city, town, county, community college district,
special taxing district, authority and public entity organized pursuant to the
laws of this state based on the total number of employees participating in the
coverage. This subsection only applies to a health plan that is
offered by the department and that is subject to title 20, chapter 1, article
1.

L. Insurance providers contracting with this state
shall separately maintain records that delineate claims and other expenses
attributable to participation of a school district, charter school, city, town,
county, community college district, special taxing district, authority and
public entity organized pursuant to the laws of this state in the state health
and accident insurance coverage and, by November 1 of each year, shall report
to the department of administration the extent to which state costs are impacted
by participation of school districts, charter schools, cities, towns, counties,
community college districts, special taxing districts, authorities and public
entities organized pursuant to the laws of this state in the state health and
accident insurance coverage. By December 1 of each year, the
director of the department of administration shall submit a report to the
president of the senate and the speaker of the house of representatives
detailing the information provided to the department by the insurance providers
and including any recommendations for possible legislative action.

M. Notwithstanding subsection J of this section, any
school district in this state that meets the requirements of section 15-388,
a charter school in this state that meets the requirements of section 15-187.01
or a city, town, county, community college district, special taxing district,
authority or public entity organized pursuant to the laws of this state that
meets the requirements of section 38-656 may apply to the department of
administration to participate in the self-insurance program that is
provided by this section pursuant to rules adopted by the
department. A participating entity shall reimburse the department
for all premiums and administrative or other insurance costs. The
department shall actuarially prescribe the annual premium for each
participating entity to reflect the actual cost of each participating entity.

N. Any person that submits a bid to provide health
and accident coverage pursuant to this section shall disclose any court or
administrative judgments or orders issued against that person within the last
ten years before the submittal.

O. Public monies may not be spent to
pay for
genetic sequencing procedures that are
performed with a device that is produced by any of the following:

1. A company that is domiciled in a
foreign adversary.

2. A company that is owned or
substantially controlled by a company that is domiciled in a foreign ADVERSARY.

O.

P.
For the purposes of this section
:
,

1. "Company" means a for-profit sole
proprietorship, organization, association, corporation, partnership, joint
venture, limited partnership, limited liability partnership, limited liability
company, including a wholly owned subsidiary, majority owned subsidiary, parent
company or affiliate of the entities or business associations, or a nonprofit
organization.

2.
"Dependent" means
a spouse under the laws of this state, a child who is under twenty-six
years of age or a child who
was disabled

had a disability
before reaching nineteen years of age, who continues to

be disabled
have a disability
under
42 United States Code section 1382c and for whom the employee had custody
before reaching nineteen years of age.

3. "Domiciled" means either
of the following:

(
a
) The country
in which a company is registered.

(
b
) The
location in which the company's affairs are primarily completed or where a
majority of the ownership shares are held.

4.
"Foreign
adversary
":

(
a
) Means the
People's Republic of

China,
Russia, Iran, North Korea, Cuba, Venezuela or Syria or the hong kong special
administrative region.

(
b
) Includes:

(
i
) A country
that is designated as a foreign adversary by the federal government.

(
ii
) Any agent
or entity under significant control of a foreign adversary.

5.
"Genetic
sequencing
" means any method to determine the
identity and order of nucleotide bases in the human genome.

END_STATUTE

Sec. 2. Section 38-651.01, Arizona Revised
Statutes, is amended to read:

START_STATUTE
38-651.01.

Group health and accident coverage for retired public employees
and elected officials and their dependents; definitions

A. The department of administration, by rule, shall
adopt standards to establish group health and accident coverage for former
employees who worked for this state and who opt on retirement to enroll or
continue enrollment in the group health and accident coverage for active
employees working for this state, or with a disability, and receiving either
income from a retirement program of this state or long-term disability
income benefits pursuant to section 38-651.03 or chapter 5, article 2.1
of this title and their dependents and to establish eligibility for retired
state employees or state employees with a disability to participate in the
coverage. The department of administration may adopt rules that
provide that if a retired insured or insured person with a disability dies
before an insured surviving dependent, the insured surviving dependent is
entitled to extended coverage at group rates if the insured surviving dependent
elects to continue in the coverage within six months of the death of the
retired insured or insured� person with a disability and the insured surviving
dependent agrees to pay the cost of the premium for group health and accident
insurance.� On notification of the death, the department of administration
shall immediately notify an insured surviving dependent of the provisions of
this section. The department of administration may enter into
agreements with former state employees with a disability and their dependents
who elect to obtain the coverage provided by this section.� The agreements may
include provisions for the payment of amounts sufficient to pay for the premium
and administrative expense of providing the coverage. The department
of administration may adopt rules that provide that on the death of a state
employee who at the time of death was eligible for normal retirement pursuant
to section 38-757 under the Arizona state retirement system, the insured
surviving spouse and eligible dependent children are entitled to continue
coverage under group rates provided that the deceased insured state employee,
spouse and dependent children were insured at the time of the employee's
death. The insured surviving spouse shall be charged an amount
sufficient to pay the full premium for the coverage.

B. The department of administration, by rule, may
adopt standards to establish group health and accident coverage for former
elected officials of this state or its political subdivisions and their
dependents and to establish eligibility for former elected officials to
participate in the coverage. Qualifications for eligibility shall
include that the former elected official has at least five years of credited
service in the elected officials' retirement plan pursuant to chapter 5 of this
title, had been covered under a group health or group health and accident plan
while serving as an elected official and had been serving as an elected
official on or after January 1, 1983. The department of
administration may adopt rules that provide that on the death of an elected
official or insured former elected official, the insured surviving spouse is
entitled to coverage at group rates provided that the deceased insured former
elected official met or would have met the qualifications for eligibility pursuant
to this subsection or that the deceased elected official would have met the
qualifications for eligibility had the deceased not been in office at the time
of death. Except as provided in subsection J of this section, the
insured former elected official or the insured surviving spouse shall be
charged amounts that are sufficient to pay for the premium and state
administrative expense of providing coverage. Notwithstanding
subsection J of this section, the standards shall provide that all or any
portion of the former state employees or former elected officials or their
dependents shall be grouped with officers and employees of this state and its
departments and agencies or their dependents as necessary to obtain health and
accident coverage at favorable rates.

C. The Arizona state
retirement system board may enter into agreements with state employee members
of the system and plan who are retired or who have a disability, retired
members of the elected officials' defined contribution retirement system
established pursuant to chapter 5, article 3.1 of this title and retired
participants of the public safety personnel defined contribution retirement
plan established pursuant to chapter 5, article 4.1 of this title who elect to
obtain the coverage provided pursuant to subsection A of this
section. The agreements may include provision for the deduction from
the retirement benefits of participants of a retirement program of this state
who elect to obtain coverage of amounts sufficient to pay for the premium not
covered under retirement benefits and state administrative expense of providing
coverage.

D. Retired state employee members or state employee
members with a disability of the public safety personnel retirement system, the
public safety personnel defined contribution retirement plan established
pursuant to chapter 5, article 4.1 of this title, the elected officials'
retirement plan, the elected officials' defined contribution retirement system
established pursuant to chapter 5, article 3.1 of this title, the corrections
officer retirement plan or the optional retirement programs authorized pursuant
to section 15-1628 who opt on retirement to enroll or continue enrollment
in the group health and accident coverage for active employees working for this
state and their dependents and who are receiving benefits from the public
safety personnel retirement system, the public safety personnel defined
contribution retirement plan established pursuant to chapter 5, article 4.1 of
this title, the elected officials' retirement plan, the elected officials'
defined contribution retirement system established pursuant to chapter 5,
article 3.1 of this title, the corrections officer retirement plan or the
optional retirement programs authorized pursuant to section 15-1628 may
participate in group health and accident coverage provided pursuant to this
section. The department of administration shall adopt rules that are
necessary for the implementation of this subsection.

E. The board of trustees of the public safety
personnel retirement system may enter into agreements with retired state
employee members and their dependents who elect to obtain the coverage provided
pursuant to this section. The agreements may include provision for
the deduction from the retirement benefits of participants of a retirement
program of this state who elect to obtain coverage of amounts sufficient to pay
for the premium not covered under retirement benefits and state administrative
expense of providing coverage.

F. The board of trustees of the public safety
personnel retirement system may enter into agreements with retired judges and
retired elected officials and their dependents who elect to obtain the coverage
provided pursuant to this section. The agreements may include
provision for the deduction from the retirement benefits of participants of a
retirement program of this state who elect to obtain coverage of amounts
sufficient to pay for the premium not covered under retirement benefits and
state administrative expense of providing coverage.

G. The board of trustees of the public safety
personnel retirement system may contract with an insurance carrier and adopt
standards to establish a group health and accident insurance coverage program
for retired members of the public safety personnel retirement system, their
dependents and their spouses. Any members or spouses who elect to
obtain the group health and accident coverage provided under this subsection
shall agree to a deduction from their monthly retirement benefits of an amount
sufficient to pay for the premium not covered under retirement benefits and the
administrative expense of providing coverage.

H. A county board of supervisors may enter into
agreements to establish group health and accident coverage for retired county
employees or county employees with a disability and their dependents who elect
to obtain the coverage provided pursuant to section 11-263, subsection
B.� The agreements may include provision for the deduction from the retirement
benefits of participants of a retirement program of this state who elect to
obtain the coverage of amounts sufficient to pay for the premium not covered
under retirement benefits and the administrative expense of providing for the
coverage.

I. Nonmedicare eligible retirees who live in this
state, who enroll in a qualifying plan under this section and who reside
outside the area of a qualifying health maintenance organization shall be
offered the option to enroll with a qualified health maintenance organization
offered through their provider under the same premiums as if they lived within
the area boundaries of the qualified health maintenance organization provided
that:

1. All medical services are rendered and received at
an office designated by the qualifying health maintenance organization or at a
facility referred by the health maintenance organization.

2. All nonemergency or nonurgent travel, ambulatory
and other expenses from the residence area of the retiree to the designated
office of the qualifying health maintenance organization or the facility
referred by the health maintenance organization are the responsibility of and
at the expense of the retiree.

3. All emergency or urgent travel, ambulatory and
other expenses from the residence area of the retiree to the designated office
of the qualifying health maintenance organization or the facility referred by
the health maintenance organization shall be paid pursuant to any agreement
between the health maintenance organization and the retiree living outside the
area of the qualifying health maintenance organization.

J.
Public
funds

monies
shall
not be
expended

spent
to pay all
or any part of the premium of insurance pursuant to this section except for
monies authorized to be paid for any insured from the retirement plan from
which the insured is receiving benefits.

K. A retired member of the elected officials'
defined contribution retirement system established pursuant to chapter 5,
article 3.1 of this title may elect to obtain the coverage provided pursuant to
subsection A of this section, but shall pay the premium for the coverage
selected and is not eligible for benefits pursuant to section 38-783 or
38-817.

L. A retired participant of the public safety
personnel defined contribution retirement plan established pursuant to chapter
5, article 4.1 of this title may elect to obtain the coverage provided pursuant
to subsection A of this section, but shall pay the premium for the coverage
selected.� A retired participant
that
who

makes an election pursuant to section 38-869 may be eligible for group
health benefits as specified in section 38-869.

M. Public monies may not be spent to
pay for genetic sequencing procedures that are performed with a device that is
produced by any of the following:

1. A company that is domiciled in a
foreign adversary.

2. A company that is owned or
substantially controlled by a company that is domiciled in a foreign ADVERSARY.

N. For the purposes of this section:

1. "Company" means a for-profit
sole proprietorship, organization, association, corporation, partnership, joint
venture, limited partnership, limited liability partnership, limited liability
company, including a wholly owned subsidiary, majority owned subsidiary, parent
company or affiliate of the entities or business associations or a nonprofit
organization.

2. "Domiciled" means either
of the following:

(
a
) The country
in which a company is registered.

(
b
) The location
in which the company's affairs are primarily completed or where a majority of
the ownership shares are held.

3.
"Foreign
adversary
":

(
a
) Means the
People's Republic of

China,
Russia, Iran, North Korea, Cuba, Venezuela or Syria or the hong kong special
administrative region.

(
b
) Includes:

(
i
) A country
that is designated as a foreign adversary by the federal government.

(
ii
) Any agent
or entity under significant control of a foreign adversary.

4.
"Genetic
sequencing
" means any method to determine the
identity and order of nucleotide bases in the human genome.

END_STATUTE