Business Insurance
Interested in group health insurance in Arizona? Learn about your options in our guide.
Group Health Insurance in Arizona
If you’re a business owner in Arizona, you may be interested in your options for offering healthcare coverage to your employees. Group health insurance and alternatives to traditional group health insurance, also known as defined contribution plans, can both improve employee attraction and retention, as well as keep your employees happy and healthy at work.
At AZ Health Insurance Brokers, we offer completely free consultations to business owners, so they can learn more about their healthcare coverage options in Arizona. Whether your business is located in Phoenix, Scottsdale, Flagstaff, Tucson, Kingman, Tempe, Mesa, Glendale or another Arizona city, we can help. We work with the best-reviewed insurance companies in Arizona, so you have plenty of options to choose from.
The best business health insurance strategy depends on company size, workforce health, provider network needs, budget and long-term business goals—not simply choosing the lowest monthly premium.
Use this guide to learn more about what’s available related to business health insurance in Arizona. Looking for health insurance as a self-employed business owner? Read our
guide to self-employed business insurance. Call us to talk with a group health insurance in Arizona expert.
Key Takeaways
- Arizona employers have several ways to offer health insurance, including fully insured, level-funded, self-funded and ICHRA strategies.
- The right option depends on workforce size, employee demographics, provider access and long-term business goals.
- Many employers begin comparing strategies as they grow beyond 10–20 employees.
- Comparing carriers annually can reduce costs and improve employee satisfaction.
- Working with a knowledgeable broker can simplify compliance, renewals and long-term planning.
Who This Guide Is For
This guide is designed for:
- Arizona businesses comparing group health insurance options
- Employers with 2–100+ employees
- Companies evaluating fully insured, level-funded, self-funded or ICHRA strategies
- Businesses considering whether to leave a PEO
- Employers looking to improve employee recruitment and retention through better benefits
- Multi-state businesses that need broader provider access
Table of Contents
- Benefits of Offering Group Health Insurance
- Why Work With a Group Health Insurance Broker?
- Types of Group Health Insurance
- How to Choose the Right Health Plan
- Group Health Insurance by Company Size
- Arizona Group Health Insurance Carriers
- Real Arizona Business Examples
- Employee Benefit Add-Ons
- Compliance & Administrative Services
- Health Plan Network Types
- Multi-State Business Coverage
- 2026 Arizona Group Health Insurance Trends
- Business Health Insurance FAQs
Benefits of Offering Group Health Insurance for Small Businesses
Most job seekers today consider health insurance coverage to be a top sought-out benefit. According to Indeed, in 2025, 67% of employees named employer-covered healthcare as the most important benefit. If you’re still unsure about offering health insurance for workers, consider:
- According to “Forbes,” 1 in 10 workers would take a pay cut to have access to better benefits.
- When businesses offer healthcare coverage, 75% will take up the firm’s offer of coverage, a 2024 KFF study finds.
- According to the November 2024 Workplace Wellness Survey by Employee Benefit Research Institute and Greenwald Research, “Workers broadly agree that their employers have a responsibility to make sure employees are mentally healthy, physically health and financially healthy.”
Health insurance helps companies retain employees, too, as a 2024 survey found 1 in 6 Americans dislike their job, but stay in a role for the health insurance benefits, with 38% willing to endure unfulfilling work and 28% willing to endure limited career advancement to retain their employer-sponsored healthcare coverage.
Companies that are competing for top talent, in both hiring and retention, should consider health insurance as a value-add. There are many ways to offer this in-demand benefit. A
group benefits insurance consultant can help.
Advantages of Working With a Group Health Insurance Broker/ Employee Benefits Consultant
When you want to offer group health insurance, it’s helpful to partner with a group health insurance / employee benefits consultant. Typically, this doesn’t result in extra costs to a business. Rather, the group health insurance consultant gets paid through the insurance company once you decide on a plan to offer.
That means, you can get expert, personalized advice when you need it, at no extra cost to you. A group health insurance broker can present you with all your options, so you can compare costs and coverage and select the best plans for your employees now and evolve offerings in the future.
Your insurance broker can provide many benefits as an extension of your business operations. At AZ Health Insurance Brokers, we do everything we can to help our clients achieve their business goals, from group health insurance to beyond.
Different Types of Group Health Insurance
There are several ways to provide group health insurance coverage in Arizona. Small business owners can choose what works for them based on their current capabilities, and adapt plans as their business grows.
Fully Insured Group Health Insurance
Fully insured group health insurance plans are ideal for small businesses with 2 to 50 eligible employees. With these plans, insurance carriers base rates on only two factors: age and county. That means, employee pre-existing conditions won’t raise rates.
Businesses with more than 50 employees can also use fully insured group health insurance, but policies will need to be underwritten. You can discuss options further with a group health insurance broker.
Level Funded
Level funded group health insurance plans are ideal for companies with 6 to 1,000 employees. With level funded plans, the insurance carrier uses employees’ current and past health to underwrite the policy. The bigger the group, the higher potential for savings, because risk is spread out over the group.
If the total claim amount is lower than what you project at the beginning of the plan year, your business will receive money back. Level funded plans could be a good option for groups with healthy employees.
Self-Funded or Partial Funded
Self-funded group health insurance or partial funded group health insurance plans are best for large businesses with 1,000+ employees. With these types of plans, the business owner “rents” the network and pays for claims as they’re incurred. The business reimburses the carrier for the difference between what the employee is paying and the contracted amount between the carrier and the business.
Partial funding works similarly, with the addition of the business owner purchasing reinsurance (also known as stop-loss) insurance to cap risk. These plans are customizable, in that business owners can set prices for expenses, such as office visit copays and prescriptions.
Captive Insurance Model
Captive insurance is similar to self-funded insurance, in that a business takes full control of health insurance coverage for employees. Instead of renting an existing network and paying out based on claims that are made, with captive insurance, the business creates its own custom insurance company to offer the exact form of coverage they want to for employees. This type of model offers more economy of scale compared to traditional self-funding, but it also presents more risk than level funding. In some cases, a captive insurance model can decrease costs for a company, especially with a relatively healthy workforce. A captive insurance model also gives a business more control with the exact insurance model they use, since they’re creating every element.
Professional Employer Organization (PEO) / Administrative Services Organization (ASO)
A professional employer organization (PEO) acts as an outsourced human resources (HR) team and manages administrative tasks, such as health insurance benefits, payroll, workers compensation and employee training. PEO group health insurance can work for employers with 15 employees or fewer that want to offer rich benefits to their team members.
A PEO can reduce insurance rates, because your team will join a larger group of people, resulting in the spreading of risk over the bigger group. You will typically have to pay a monthly administration fee per employee in a PEO, which will increase expenses and may deter some companies from choosing this option.
Similar to a PEO, an administrative services organization (ASO) helps with HR functions, but an ASO doesn’t act as a co-employer like a PEO does. ASOs are third-party vendors that only support administrative tasks. A business will typically pay less for ASO services compared to PEO services.
How to Choose Group Health Insurance
To compare the above ways to get group health insurance for employees, look at the below table.
| Type of Insurance | Best for # of Employees | How Costs Are Determined |
|---|---|---|
| Fully Insured | 2-1000 employees | Age and county |
| Level Funded | 6-1,000 employees | Health of employees/number of employees lowers risk and costs |
| Self-Funded, Partial Funded or Captive Insurance | 1,000+ employees | By employer |
| Professional Employer Organization (PEO) | <15 employees | Based on total benefits offered by PEO, plus administration fee per employee |
How to Narrow Down Your Options
If your business...
If your business...
Has 2–10 employees
Has 10–20 employees
Has 20–100 employees
Has 100+ employees
Operates in multiple states
Individual coverage or QSEHRA/ICHRA
Compare all available options
Fully insured, level-funded and ICHRA
Self-funded, captive or ASO strategies
National PPO or ICHRA strategy
Best Health Insurance Strategy by Company Size
In addition to comparing group health insurance types to match up with your business, you can also use your company size to compare the best healthcare coverage options that make the most sense for your sized business. Consider the following.
| Company Size | Healthcare Coverage Options |
|---|---|
| 2-5 employees | Individual Coverage Health Reimbursement Arrangement (ICHRA) Small Business Health Options Program (SHOP) through the Affordable Care Act (ACA) Marketplace Private health insurance |
| 6-20 employees | ICHRA Fully insured group health insurance Level funded group health insurance PEO |
| 20-50 employees | Fully insured group health insurance Level funded group health insurance |
| 50-100 employees | Fully insured group health insurance Level funded group health insurance Self-funded |
| 100+ employees | Fully insured group health insurance Level funded group health insurance Self-funded ASO services Captive insurance model |
The "Rule of 20" Milestone (a benchmark we use): Arizona law lets you write a small-group plan with as few as 2 employees, but around 20 employees is where the math tends to shift. Twenty is also a real regulatory line — it's the point where federal COBRA and Medicare Secondary Payer rules begin to apply — and it's the range where a larger, more predictable claims pool often makes level-funded plans more competitive against individual-reimbursement strategies. If you're approaching 20 employees, it's worth comparing your current setup against level-funded and fully insured group options rather than assuming what you have is still the best fit. Because every workforce is different, we recommend comparing multiple strategies, not relying on headcount alone.
Group Health Insurance Carriers
Whether you’re shopping for group plans in Arizona or nationally, AZ Health Insurance Brokers will help you choose the right carrier partners.
Arizona Group Health Insurance Carrier Comparison
| Carrier | Often Best For | Strength |
|---|---|---|
| UnitedHealthcare | National employers | Largest PPO network |
| AZ Blue | Rural Arizona | Broad statewide access |
| Aetna | 20–100 employees | Competitive pricing |
| Cigna | Larger employers | National reach |
| TPAs | Cost-focused employers | Flexible plan design |
Quick Tip: Compare Total Value, Not Just Premium
The lowest monthly premium isn't always the best value. Consider provider networks, employee satisfaction, prescription coverage, renewal history and long-term cost trends before selecting a group health plan.
Arizona Group Health Insurance Comparison Guide
| Carrier | Pros | Cons |
|---|---|---|
| UnitedHealthcare (UHC) | Has largest preferred provider organization (PPO) network in the country Focuses heavily on integrated health and wellness programs Known for innovation, such as Surest from UHC, which only requires copays, no deductibles | Stringent on prior authorizations |
| Blue Cross Blue Shield of AZ (BCBS of AZ) | Rural coverage strengths Strong Rx formulary Sought-after insurer for strong brand name and high quality | Network may not be as beneficial for businesses with employees who travel frequently out of state |
| Cigna | Strong provider for large groups with 100+ enrolled Strong level funded and ASO options Heavy focus on cost containment and flexible plan designs | Can be a more costly solution compared to other group insurers |
| Aetna | Strong local presence, with ties directly into Banner Health Network in Arizona Strong narrow network options that offer savings Business health insurance options for all group sizes | Network size may not be as robust as Cigna or UHC, which could pose issues for workforces that frequently travel out of state |
| TPA-administered insurers | Businesses could achieve as much as 50% cost savings compared to traditional health insurance plans Plan design flexibility Personalized customer support and claims negotiation compared to traditional group health insurance plans | Lacks big brand-name insurer access Rates can vary greatly compared to traditional group plans |
Examples of Arizona Businesses Buying Group Health Insurance
We’ve helped countless Arizona businesses find the right healthcare coverage for their employees, based on factors like budget, group size and employee healthcare needs. The following are three examples of Arizona businesses we’ve helped find solutions for.
Lowering Fees by Exiting a PEO
We worked with a group with ~100 full-time employees that had been stuck in a PEO for years and wanted to lower costs. We helped them exit the unsatisfactory PEO arrangement, eliminated the PEO administration fees, and connected their tech platform with a new Aetna healthcare arrangement with secured rates that were 15% less than the PEO costs. This new single sign-on solution offered similar coverage at a fraction of the cost.
Reduced Costs & Improved Administration
We worked with a group with ~80 full-time employees who were spread across multiple states. The business had service issues with their previous broker. After taking over health insurance broker services for this business, we both fixed all their previous administrative issues and reduced medical insurance costs for 2 consecutive years, with Cigna as the chosen plan provider.
Transition From Fully Insured to Self-Funded
We worked with a business with ~650 full-time employees that previously had fully insured health insurance rates with ballooning costs. We leveraged self-funding for the business via a TPA that helps manage claims more effectively (healthEZ), and now the business and its employees are more satisfied with their health insurance coverage.
Every employer is different. The right solution depends on workforce demographics, healthcare utilization, recruitment goals and long-term business strategy.
Group Health Insurance Add-Ons
In addition to offering health insurance for essential services like annual checkups and emergency services, some employers provide employees with additional benefits. The following can easily be added to a traditional group health insurance plan offered by employers.
Group Dental Insurance
Dental health is linked to overall health, so dental insurance is a perfect complement to traditional health insurance. A dental health insurance plan will cover routine cleanings and procedures, like dental fillings.
Small business owners who are invested in their employees’ overall health should consider offering dental insurance.
Life Insurance
Life insurance is an insurance policy that provides coverage for your employees’ spouses and dependents, should the employee pass away. It helps ensure their family can continue to pay for essential expenses, even when their income is no longer available.
There are several types of life insurance employers may offer employees. These include whole life insurance, term life insurance and universal life insurance. Life insurance can be another value-add that helps employers attract and retain top talent.
Disability Insurance
Disability insurance covers employees should they experience a disability that impacts their ability to work. Covered disabilities include physical disabilities, mental disabilities and sickness.
Accident Insurance
Accident insurance is similar to disability insurance, in that it provides coverage for workers who are involved in accidents that impact their ability to work. Accident insurance can also extend to coverage for death due to an accident.
Critical Illness Insurance
Similar to disability and accident insurance, critical illness insurance offers protection due to unforeseen circumstances – in this case, a critical illness. Typically, these plans pay out a lump sum payment for critical illnesses, such as cancer or a heart attack. The insured party’s dependents can use this payment to cover medical costs, lost income or whatever other expenses they want to use the funds toward.
Third-Party Administration Services
In addition to helping small business owners navigate traditional group health insurance options like those above, the AZ Health Insurance Brokers team can assist with third-party administration services for a variety of business needs. These include the following.
Wrap & POP Documents
A wrap document is a breakdown of benefits offered to employees, including benefit details and disclosures.
POP stands for Premium Only Plan, also known as a Section 125 or Cafeteria 125 plan. POPs enable employees to pay for health insurance premiums tax-free, which helps employers lower taxes they need to pay toward Social Security match. We can help create wrap and POP documents that meet all compliance standards.
1095 / 1094 Reporting
Employers must file Internal Revenue Service (IRS) forms 1094-C and 1095-C when they’re required to offer health insurance coverage to employees under the Affordable Care Act. If your business needs to submit these, we can help you prepare these tax forms.
Other Employee Health Coverage Options
01 HSA
Health savings accounts (HSAs) are savings accounts that are specifically used for healthcare costs. HSAs must pair with high deductible health plans (HDHPs). Both employers and employees may contribute to their HSA and use those contributions tax-free now and in the future. HSA funds roll over year after year.
02 FSA
Flexible spending accounts (FSAs) are also savings accounts that accountholders can use to pay for out-of-pocket healthcare costs. Accountholders don’t have to pay taxes on FSA contributions, but FSA funds don’t roll over unlimited each year.
03 HRA
Health reimbursement arrangements (HRAs) allow small business owners to offer tax-free healthcare reimbursement to workers. Employers can determine what a plan covers and up to how much you’ll reimburse. HRA plan types include:
04 ICHRA
An Individual Coverage Health Reimbursement Arrangement (ICHRA) , a type of HRA, can be a flexible offering for employers who want to offer health coverage to employees, while also controlling costs and giving employees more choice in the health insurance they get. With an ICHRA, you offer a fixed tax-free monthly allowance for health insurance and medical expenses. Employees can use the funds for qualified expenses.
As the employer, you determine what employees can use ICHRA funds for. This can include insurance premiums only, qualified medical expenses only or both insurance premiums and qualified medical expenses. You can adjust the allowance amount at each ICHRA renewal date.
For small business owners who need assistance deploying one of the above accounts or documents for employees, the AZ Health Insurance Brokers team can help.
For small business owners who need assistance deploying one of the above accounts or documents for employees, the AZ Health Insurance Brokers team can help.
Different Group Health Insurance Network Types
In addition to different ways to buy health insurance, there are different types of health insurance networks within the various plans. These include the following, which you can learn more about when you talk with a group health insurance expert to compare options. To learn about which plan type may work best for your employees, talk with a group health insurance broker.
Preferred Provider Organization (PPO)
Preferred provider organizations (PPOs) offer discounts for using providers in the plan’s network, but also give plan holders the options to see out-of-network providers for an additional cost.
Health Maintenance Organization (HMO)
A health maintenance organization (HMO) also limits coverage for doctors who are within the plan’s network. To see a specialist, you’ll typically need a referral from your primary care doctor.
Exclusive Provider Organization (EPO)
An exclusive provider organization (EPO) limits coverage and only provides it for specific doctors, specialists and hospitals in the plan’s network.
Point of Service (POS)
A point of service (POS) plan offers accountholders savings if they use doctors, hospitals and healthcare providers within the plan’s network. To see a specialist while using a POS plan, you’ll typically need a referral from a primary care doctor.
2026 Trends for AZ Group Health Insurance
Changing trends in the business insurance landscape are causing many business owners to rethink what they offer to employees and how they can better serve both their workforce and their own business needs. In 2026 in Arizona, take note of the following trends that may impact how you approach group health insurance.
Premium Increases
In 2026, Arizona business owners are seeing a 29% blended average increase in health insurance premiums— the 12th-largest rate increase in the nation, according to AZ Big Media. Some business owners are adjusting their budgets to account for the increase, while others are passing increasing deductible costs on to employees.
The good news is, some insurance carriers are adjusting their offerings to help offset those costs. For example, AZ Blue (BCBS of AZ) is decreasing 10% of administrative costs and increasing preventive care service offerings to help insured professionals avoid ER, hospital and specialist visits.
It’s important to compare all carriers when selecting group health insurance in Arizona, so you can find the most competitive rates for your size business. For example, in Arizona, we’re seeing Aetna offering lower rates than legacy carriers for the 20-100 space. Talk with an AZ Health Insurance Broker to compare your offerings.
Increase in Level Funded Plans
Another way employers are avoiding increasing insurance costs is to turn to level funded plans for their businesses. Level funded health insurance can provide cost savings when a workforce is relatively healthy, since businesses can control the amount they’re paying every month and use stop-loss insurance to protect against claims that exceed what they’ve paid for.
With rising costs, businesses are carefully comparing all their health insurance options, beyond traditional fully insured plans. Level funded plans are, accordingly, increasing in popularity as a way for employers to save, while still offering employees vital healthcare coverage.
Brokerage Guidance to Save Money
Another way employers are saving money is by using the services of a health insurance broker to compare plans and identify employee usage patterns that point to the best options. Arizona businesses that simply renew a plan year after year face the risk of high cost increases, when a broker who provides tailored advice can offer valuable savings.
An Arizona health insurance broker will also help a business evaluate pharmacy costs, which as a big driver in the increase in insurance premiums. We recommend looking at this key factor when comparing plans, and doing so early on in the renewal process.
Contact AZ Health Insurance Brokers for Group Health Insurance Assistance
If you want to attract and keep talented employees at your business, it’s essential to consider offering health insurance coverage for your employees. The team at AZ Health Insurance Brokers can help you learn about all your options and help you select a budget-friendly plan that benefits your employees.
Benefits to consider with working with a broker include:
- Fiduciary service: We’ll place you with the appropriate carrier for what you need, and ensure that you’re aligned with rates you want, including a low-cost option if that’s preferable. We’ll also help you look at overall strategy and long-term costs versus value, and will help you pivot insurance strategies depending on your business growth and evolution. Your broker should feel like a business partner and an extension of your human resources (HR) team.
- Customer service: We’ll provide you with accurate, quick, concise information when you need answers to questions. We’re readily available to you, so your HR department and employees can get information when they need it. We’ll also provide tailored solutions based on what your business needs, whether that’s help with employee engagement in health insurance programs, or technology assistance.
- Technology: Speaking of technology, it has transformed the group health insurance landscape. We’ll help you understand how to use business health insurance technology and stay in compliance while easing the strain on your HR team.
- Compliance: Related to compliance, we’ll handle all of your health insurance benefits compliance details, including proactively letting you know when compliance requirements change based on milestones your business achieves. Compliance laws change frequently, and we will can work with your HR team to alert them on the latest developments.
- Well-rounded knowledge: Health insurance broker roles have evolved beyond insurance. A great broker will help make strategic recommendations as a partner to your business, which can include areas like payroll, 401(k) and general liability.
If you need help with offering business health insurance, contact us for a FREE consultation.
Business Health Insurance Tips
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4 Group Health Insurance Funding Strategies
02
5 Pieces of Business Health Insurance Compliance
03
3 Common Group Insurance Renewal Mistakes
04
5 Common Mistakes With Group Health Plan Setup
05
Benefits of Working With a Health Insurance Broker
Business Insurance FAQs
Have a question? We’re here to help.
Written by: Nicki Escudero
Nicki Escudero is a healthcare content writer who specializes in creating educational resources about health insurance, employee benefits and healthcare topics. She works closely with licensed Arizona health insurance professionals to ensure articles are accurate, easy to understand and reflect current market trends. Her goal is to help Arizona individuals, families and business owners make informed health insurance decisions through clear, well-researched content.
Reviewed by: Ethan J. Pickner, Licensed Arizona Health Insurance Broker
Ethan J. Pickner
is the founder of AZ Health Insurance Brokers and a licensed Arizona health insurance broker. Since 2014, he has helped thousands of Arizona individuals, families and small businesses compare and choose health insurance coverage. Ethan specializes in individual and family health insurance, small business coverage, and HRA strategies — including ICHRAs — that help businesses fund employee healthcare. He reviews educational content for accuracy, regulatory relevance and practical guidance based on current Arizona health insurance markets.
Reviewed by: Ryan Calloway, Group Benefits Specialist
Ryan Calloway is a Group Benefits Specialist at AZ Health Insurance Brokers who focuses on employer-sponsored health insurance solutions for Arizona businesses. He works with employers to compare fully insured and level-funded group plan structures, helping companies weigh costs, provider networks and employee benefit options. Ryan has extensive experience assisting growing businesses as they transition from individual reimbursement arrangements to group health insurance plans that align with their workforce, budget and long-term business goals. He reviews employer-focused content to ensure it reflects current market trends and practical considerations for Arizona businesses.
Editorial Standards: Every article published by AZ Health Insurance Brokers is researched using current carrier information, federal and Arizona insurance guidance, and is reviewed by a licensed Arizona health insurance professional before publication. Articles are reviewed periodically to reflect changes in health insurance regulations, carrier offerings and market trends.
