Arizona Health Insurance Practice Exam

How many employees are required for a small employer medical expense plan to be valid in Arizona?

1. 1

2. 2

3. 3

4. 5

The correct answer is: 2

In Arizona, a small employer medical expense plan requires a minimum of two employees for it to be valid. This requirement helps to ensure that the plan effectively addresses the needs of a small group rather than being a single-employee plan, which may not have the same risk-sharing dynamics. The stipulation for two employees allows for a better distribution of risk among the members of the plan, which is an essential aspect of how insurance pools work. While some states might define small employers differently, Arizona follows this specific guideline, emphasizing the importance of having multiple participants involved. This promotes not only a more sustainable insurance model but also aligns with the notion of shared responsibility among employees when it comes to health coverage. A single employee would not be able to create a valid group plan, which is why having at least two is necessary.