classical learning; tests; examinations

Plain English Breakdown

The official text lists specific data points for prescription drugs but is truncated before listing all items; however, enough detail exists to confirm the requirement.

SB1497: Rules for School District Self-Insurance and Data Reporting

This law requires large school districts with self-insurance programs to get price quotes every four years and mandates that insurance partners provide detailed data reports.

What This Bill Does

• Requires school district governing boards with at least 300 employees who use self-insurance for health, disability, or medical services to obtain coverage quotes once every four years.
• Prohibits districts from renewing contracts with providers that do not provide timely, accurate, and complete information as required by law.
• Mandates that insurance partners submit specific data reports in an electronic format at least 60 days before the benefit year ends.
• Requires detailed reporting on high-cost claims exceeding $50,000 using de-identified data to protect privacy under federal HIPAA rules.
• Specifies exact details needed for prescription drug reports, including drug names, costs, and quantities dispensed.

Who It Names or Affects

• School district governing boards that employ at least 300 people and operate self-insurance programs for health or disability benefits.
• Trusts, insurers, third-party administrators, pharmacy benefit managers, and other persons supporting these school districts' self-insurance programs.

Terms To Know

Self-insurance program

A system where a school district sets aside its own funds to pay for employee claims instead of buying full insurance from an outside company.

De-identified data

Information that has been changed so it cannot be linked back to specific individuals, protecting their privacy under federal law.

Benefit program year

The period during which the school district's insurance or self-insurance plan is active for employees and dependents.

Limits and Unknowns

• This law only applies to school districts with at least 300 employees that use self-insurance specifically for health, disability, or medical services.
• The official text provided does not specify the exact effective date when these rules begin.

Official Summary Text

SB1497 - 572R - Senate Fact Sheet

Assigned to
ED������������������������������������������������������������������������������������������������������������� AS
PASSED BY HOUSE

ARIZONA STATE SENATE

Fifty-Seventh
Legislature, Second Regular Session

AMENDED

FACT SHEET FOR
S.B. 1497

classical
learning; tests; examinations

(
NOW: school
districts; insurance quotes
)

Purpose

Requires a
school district governing board (governing board) that establishes a

self-insurance program

and employs at least 300 employees to
obtain quotes
for coverage and services at least once every four years. Requires the person
who supports a school district's

self-insurance program to provide the school district prescribed insurance
information at least 60 days before the end of the current benefit program
year.

Background

A governing
board may determine that self-insurance is in the best interest of the district
and provide for a self-insurance program or programs for the school district,
including risk management consultation. A governing board must verify that any
risk management consultant or insurance administrator the governing board
employs is licensed by the Department of Insurance and Financial Institutions.
A school district governing board may: 1) enter into intergovernmental
agreements or contracts for participation in programs offered by public agency
pools; 2) separately contract with a trustee or board of trustees that provides
a common self-insurance program or programs with pooled funds and risks to more
than one district, a community college district, or an association of Arizona
school districts that is funded by member school districts or a pool created
for and operated solely for charter schools; 3) enter into cooperative
procurement agreements with other school districts to participate in programs
for self-insurance or the joint purchase of insurance; or 4) separately
establish a self-insurance program solely for the school district.

If a governing
board, either alone, in combination with another school district or with an
association of Arizona school districts establishes a self-insurance program,
the governing board or an association of school districts must place all funds
into a trust to be used for payment of: 1) uninsured losses; 2) claims; 3)
defense costs; 4) costs of training designed to reduce losses and claims; 5)
the cost of related employee benefits including wellness programs, life,
disability and other fully and partially insured group insurance plans; 6)
programs that allow for participation in a cafeteria plan that meets federal
tax requirements; and 7) costs of administration and other related expenses (
A.R.S. � 15-382
).

There is no
anticipated fiscal impact to the state General Fund associated with this
legislation.

Provisions

1.

Requires
the governing board of a school district that employs at least 300 employees
and establishes a self-insurance program to obtain quotes for coverage and
services from authorized service providers at least once during every four-year
period to determine whether comparable coverage and services are available at a
more favorable price, if the governing board establishes a self-insurance program
to:

a)

purchase of disability or health benefit plans insurance;

b)

pooling retention of its risk of loss for health or accident claims; or

c)

the
provision of health and medical services.

2.

Prohibits a governing board from renewing coverage or services from any
person that fails to provide timely, accurate and complete information as
prescribed.

3.

Requires,
at least 60 days before the end of the current benefit program year, each
trust, insurer, third-party administrator, pharmacy benefit manager or other
person who supports a school district's self-insurance program to provide the
following information to the school district in an electronic, machine-readable
format:

a) monthly enrollment counts by
employee-only and dependent tiers for each plan option offered to the school
district for the two calendar years that immediately precede the current year;

b) monthly total claims paid for the
two calendar years that immediately precede the current year, disaggregated by
medical claims and prescription drug claims;

c) a detailed report on enrollees
whose total claims paid exceeds $50,000 for any of the four calendar years that
immediately precede the current year and enrollees whose total claims paid is
projected to exceed $50,000 for the current year;

d) detailed prescription drug data
for the immediately preceding 12-month period for all enrollees;

e) complete documentation for each
benefit plan currently available to the school district's employees; and

f) a
report of comprehensive eligibility census data for all employees and
dependents who participate in the school district's self-insurance program that
is updated not more than 60 days before the report is submitted.

4.

Specifies
that the detailed report relating to enrollees who total claims paid exceed
$50,000 must include only de-identified data, comply with the federal Health
Insurance Portability and Accountability Act (HIPAA) and include:

a) the total claims paid for each
enrollee;

b) each enrollee's diagnosis or a
description of each enrollee's medical condition or conditions; and

c) a
statement indicating whether each claim is completed with no further health
care services expected or is ongoing with additional health care services
expected or required to address the enrollee's diagnosis.

5.

Specifies that the detailed prescription drug data must include:

a)

the
National Drug Code;

b)

the
date each prescription was filed;

c)

the
drug name;

d)

the
total days' supply of the drug;

e)

the
metric quantity that is dispensed;

f)

the
ingredient cost;

g)

the
dispensing fee;

h)

the
pharmacy provider number;

i)

the
amount paid by the school district, if any;

j)

the
amount paid by the enrollee, if any;

k)

the
total amount of rebates received, including rebates by the drug manufacturer
and the method of allocation;

l)

the
amount of pharmacy benefit manager administrative fees paid, if any;

m)

any other fees charged
to the school district, including pre-claim fees, network access fees, data or
clinical program fees, spread-pricing components and all sources of pharmacy
benefit manager compensation charged to the school district; and

n)

whether pricing is set on a pass-through or spread basis.

6.

Specifies that the documentation for each benefit plan currently
available must include:

a)

summary
benefits and coverage;

b)

full
plan documents or benefit booklets;

c)

prescription
drug formularies; and

d)

cost-sharing structures, deductibles and out-of-pocket maximums.

7.

Specifies that the report relating to comprehensive eligibility census
data must include only de-identified data, comply with HIPAA and include the
following for each person:

a)

date
of birth;

b)

gender;

c)

zip
code of residence;

d)

coverage
tier; and

e)

selected plan.

8.

Defines

authorized service providers
as:

a)

two or more service providers available through the pool, trustee or
board of trustees that administers the school district's self-insurance
program;

b)

two or more qualified insurers that provide proposals directly to the
governing board; or

c)

a licensed insurance provider who obtains proposals from two or more
qualified insurers on behalf of the governing board.

9.

Makes
technical and conforming changes.

10.

Becomes effective on the
general effective date.

Amendments
Adopted by Committee

�

Adopted the strike-everything amendment.

Amendments Adopted by the
Committee of the Whole

1.

Requires a governing board that establishes a self-insurance program as
outlined to obtain quotes for coverage and services as prescribed at least once
during every four-year period, rather than every three-year period.

2.

Specifies that the requirement to obtain a quote for insurance coverage
every four years applies to governing boards that establish a self-insurance
program to:

a)

purchase disability or health benefit plans insurance;

b)

pool the retention of risk of losses for health or accident claims; or

c)

provide
health and medical services.

3.

Specifies that the detailed report that outlined individuals must
provide to a school district when obtaining quotes for coverage must include
enrollees whose total claims paid exceed $50,000 for any of the four calendar
years, rather than three calendar years, that immediately precede the current
year.

4.

Exempts, from the self-insurance procurement requirements relating to
obtaining quotes for coverage, a school district that participates in a
self-insurance program that:

a)

is provided by a nonprofit corporation health care pool;

b)

has two or more network options for school district members; and

c)

has
an administrator that is a nonprofit corporation.

5.

Defines
authorized service providers
.

6.

Makes technical and conforming changes.

Amendments Adopted by the
House of Representatives

1.

Removes the exemptions from the self-insurance procurement requirements for
a school district that participates in a self-insurance program that meets
specified criteria.

2.

Makes conforming changes.

Senate Action
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House
Action

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Prepared by Senate Research

June 2, 2026

MH/KP/hk

Current Bill Text

Chapter 0231 - 572R - H Ver of SB1497

House Engrossed
Senate Bill

classical
learning; tests; examinations

(now: school
districts; insurance quotes)

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

CHAPTER 231

SENATE BILL 1497

AN
ACT

amending section 15-382, Arizona
Revised Statutes; relating to school insurance.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Section 15-382, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-382.

Authorization to self-insure; pooling agreements; joint
agreements; trustees; liability coverage and pool requirements; annual required
coverage information; definition

A.
The

A
school
district governing board may determine that self-insurance is necessary
or desirable in the best interest of the district and may provide for a self-insurance
program or programs for the district
,
including risk
management consultation. Any risk management consultant or insurance
administrator employed by a school district governing board must be licensed
under title 20, chapter 2, article 3 or 9, and
such

the
license shall be verified by the school district governing
board
prior to

before
employment.

B. The school district governing board may:

1. Enter into intergovernmental agreements or
contracts with pools operated pursuant to section 11-952.01 for
participation in
self-insurance
programs offered by
public agency pools. In addition to the joint purchasing of
insurance or reinsurance or the pooling of the retention of risks for property,
fidelity and liability losses, these
self-insurance
programs
may include the joint purchasing of health benefits plan, life or disability
insurance, prepaid legal insurance or the pooling of the retention of their
risks of losses for health, accident, life or disability claims or the
provision of the health and medical services enumerated in section 36-2907.

2. Separately contract with a trustee or board of
trustees that provides a common self-insurance program or
self-insurance

programs with pooled funds and risks to more than one district, a
community college district formed pursuant to chapter 12 of this title or an
association of school districts within this state that is funded by member
school districts pursuant to section 15-342, paragraph 8 or a pool
created for and operated solely for charter schools pursuant to section
11-952.01. Beginning January 1, 2010, a trustee, board of trustees or pool that
contracts with a school district governing board or charter school pursuant to
this paragraph shall comply with title 38, chapter 3, article 3.1, title 39,
chapter 1 and section 11-952.01, subsections M and N.

3. Enter into cooperative procurement agreements
with other districts pursuant to rules adopted pursuant to section 15-213
to participate in programs for either self-insurance or the joint
purchase of insurance.

4. Separately establish a self-insurance
program solely for its district.

C. If the school district governing board, either
alone or in combination with another school district or an association of
school districts in this state that is funded by member school districts
pursuant to section 15-342, paragraph 8, establishes a self-insurance
program, the governing board or an association of school districts shall place
all funds into a trust to be used for payment of uninsured losses, claims,
defense costs, costs of training designed to reduce losses and claims, the cost
of related employee benefits including wellness programs, life, disability and
other fully and partially insured group insurance plans, programs that allow
for participation in a cafeteria plan that meets the requirements of the United
States internal revenue code of 1986, costs of administration and other related
expenses. If a member of the governing board or employee of the
school district is acting as a trustee, the trust shall be administered by at
least five joint trustees, of whom
no

not
more
than one may be a member of the governing board and
no

not
more than one may be an employee of the school
district. Funds budgeted for self-insurance programs
shall be

are
subject to district budgetary
requirements, including
but not limited to
the
requirements that the funds be budgeted within the maintenance and operation
section and the budget limitation on increases as prescribed in section 15-905. The
funds,
upon

on
being placed in the
trust,
shall

do
not lapse at the
close of the fiscal year, except that any cash balance remaining after
termination of the
self-insurance
program and
settlement of all outstanding claims shall be used for reduction of school
district taxes for the budget year. The trustees of the trust must
be bonded, a stop-loss provision must be incorporated in the trust
agreement, and an annual audit must be performed by a certified public
accountant and a copy of the report kept on file in the district office for a
period of
not less than

at least
five
years.

D. If the self-insurance is for liability
losses, excess liability coverage or reinsurance must be obtained as follows:

1. For a single school district, the coverage may
include an annual aggregate limit of
no

not

more than
three million dollars

$3,000,000

and the maximum retention per occurrence shall be one-half of one
per cent

percent
of the district's
maintenance and operation budget.

2. For a pool, the coverage may include an annual
aggregate limit set by the pool and the maximum retention per occurrence shall
not exceed one-half of one
per cent

percent

of the combined maintenance and operation budgets of the districts in
the pool.

E. If
a school district governing board establishes a self-insurance program
pursuant to this section
to purchase disability or health
benefit plans insurance, pool the retention of risks of losses for health or
accident claims or provide health and medical services
and the school district employs at
least three hundred employees, the school district governing board shall obtain
quotes for coverage and services from authorized service providers at least
once during every four-year period to determine whether comparable
coverage and services are available at a more favorable price. A
school district governing board may not renew coverage or services from any
person that fails to provide timely, accurate and complete information as
required by subsection F of this section.
For
the purposes of this subsection, "authorized service providers" means
any of the following:

1. Two or more service providers that
are available through the pool, trustee or board of trustees that administers
the school district's self-insurance program.

2. Two or more qualified insurers
that provide proposals directly to the school district governing board.

3. An insurance producer who is
licensed pursuant to title 20, chapter 2, article 3 and who obtains proposals
from two or more qualified insurers on behalf of the school district governing
board.

F. At
least sixty days before the end of the current benefit program year, each
trust, insurer, third-party administrator, pharmacy benefit manager or
other person who supports the school district's self-insurance program
shall provide the following information to the school district in an
electronic, machine-readable format:

1. Monthly
enrollment counts by employee-only and dependent tiers for each plan option
offered to the school district for the two calendar years that immediately
precede the current year.

2. Monthly
total claims paid, disaggregated by medical claims and prescription drug
claims, for the two calendar years that immediately precede the current year.

3. A
detailed report on
enrollees
whose total claims paid exceeds
$50,000 for any of the four calendar years that immediately precede the current
year and
enrollees
whose total claims paid is projected to exceed
$50,000 in the current year. The report required by this paragraph must include
only de-identified data, comply with the health insurance portability and
accountability act of 1996 (P.L. 104-191; 110 Stat. 1936) and include the
following:

(
a
) The total claims paid
for each
enrollee
.

(
b
) Each
enrollee's diagnosis or a description of each
enrollee's
medical condition or conditions.

(
c
) A statement indicating
whether each claim is:

(
i
) Completed with no
further health care services expected.

(
ii
) Ongoing with
additional health care services expected or required to address the
enrollee's

diagnosis, medical condition or medical conditions.

4. Detailed
prescription drug data for the immediately preceding twelve-month period
for all enrollees, including the following line-level details:

(
a
) The national drug
code.

(
b
) The date each
prescription was filled.

(
c
) The drug name.

(
d
) The total days' supply
of the drug.

(
e
) The metric quantity
that is dispensed.

(
f
) The ingredient cost.

(
g
) The dispensing fee.

(
h
) The pharmacy provider
number.

(
i
) The amount paid by the
school district, if any.

(
j
) The amount paid by the
enrollee, if any.

(
k
) The total amount of
rebates received, including rebates by the drug manufacturer and the method of
allocation.

(
l
) The amount of pharmacy
benefit manager administrative fees paid, if any.

(
m
) Any other fees charged
to the school district, including per-claim fees, network access fees,
data or clinical program fees, spread-pricing components and all sources
of pharmacy benefit manager compensation charged to the school district.

(
n
) Whether pricing is set
on a pass-through or spread basis.

5. Complete
documentation for each benefit plan currently available to the school
district's employees, including the following for each plan:

(
a
) Summary benefits and
coverage.

(
b
) Full plan documents or
benefit booklets.

(
c
) Prescription drug
formularies.

(
d
) Cost-sharing
structures, deductibles and out-of-pocket maximums.

6. A
report of comprehensive eligibility census data for all employees and for all
dependents who participate in the school district's
self-insurance

program that is
updated not more than sixty days before the report is submitted. The report
required by this paragraph must include only de-identified data, comply
with the health insurance portability and accountability act of 1996 (P.L. 104-191;
110 Stat. 1936) and include
, for each employee and
dependent,
all of the
following:

(
a
) Date of birth.

(
b
) Gender.

(
c
) Zip code of residence.

(
d
) Coverage tier.

(
e
) Selected plan.

E.

G. For
the purposes of this section,
"self-insurance program"
:

as used in this section

1.
Means programs established
and wholly or partially funded by the school district governing
board.
Self-insurance programs shall

2. Does
not include a decision
by the governing board not to carry insurance
upon

on
a particular risk or risks.
END_STATUTE

APPROVED BY THE GOVERNOR JUNE 22, 2026.

FILED IN THE OFFICE OF THE SECRETARY OF STATE JUNE 22, 2026.