Stricken language would be deleted from and underlined language would be added to present law.
Act 774 of the Regular Session
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State of Arkansas As Engrossed: S4/7/25 1
95th General Assembly A Bill 2
Regular Session, 2025 SENATE BILL 527 3
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By: Senators Irvin, Hester, J. Dismang, Gilmore, J. Boyd, B. Johnson, Stone 5
By: Representatives L. Johnson, Achor, Bentley, Clowney, Eaves, Eubanks, Evans, Gramlich, Hudson, 6
Ladyman, Lundstrum, Maddox, Perry, Pilkington, M. Shepherd, Vaught, Walker, Wardlaw 7
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For An Act To Be Entitled 9
AN ACT TO AMEND THE ARKANSAS HEALTH AND OPPORTUNITY 10
FOR ME ACT OF 2021; TO INCREASE THE MEDICAL -LOSS 11
RATIO IN THE ARKANSAS HEALTH AND OPPORTUNITY FOR ME 12
PROGRAM; TO AUTHORIZE THE STATE TO OBTAIN PHARMACY 13
REBATES UNDER THE ARKANSAS HEALTH AND OPPORTUNITY FOR 14
ME PROGRAM; AND FOR OTHER PURPOSES. 15
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Subtitle 18
TO AMEND THE ARKANSAS HEALTH AND 19
OPPORTUNITY FOR ME ACT OF 2021; AND TO 20
INCREASE THE MEDICAL -LOSS RATIO IN THE 21
ARKANSAS HEALTH AND OPPORTUNITY FOR ME 22
PROGRAM. 23
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 25
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SECTION 1. Arkansas Code §§ 23 -61-1002 and 23-61-1003 are amended to 27
read as follows: 28
23-61-1002. Legislative intent. 29
Notwithstanding any general or specific laws to the contrary, it is the 30
intent of the General Assembly for the Arkansas Health and Opportunity for Me 31
Program to be a fiscally sustainable, cost -effective, and opportunity -driven 32
program that: 33
(1) Achieves comprehensive and innovative healthcare reform that 34
reduces the rate of growth in state and federal obligations for providing 35
healthcare coverage to low -income adults in Arkansas; 36 As Engrossed: S4/7/25 SB527
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(2) Reduces the maternal and infant mortality rates in the state 1
through initiatives that promote healthy outcomes for eligible women with 2
high-risk pregnancies; 3
(3) Promotes the health, welfare, and stability of mothers and 4
their infants after birth through hospital -based community bridge 5
organizations; 6
(4) Encourages personal responsibility for individuals to 7
demonstrate that they value healthcare coverage and understand their roles 8
and obligations in maintaining private insurance coverage; 9
(5) Increases opportunities for full -time work and attainment of 10
economic independence, especially for certain young adults previously 11
incarcerated individuals , to reduce long-term poverty that is associated with 12
additional risk for disease and premature death; 13
(6) Addresses health -related social needs of Arkansans in rural 14
counties through hospital -based community bridge organizations and reduces 15
the additional risk for disease and premature death associated with living in 16
a rural county; 17
(7) Strengthens the financial stability of the critical access 18
hospitals and other small, rural hospitals; and 19
(8) Fills gaps in the continuum of care for individuals in need 20
of services for serious mental illness and substance use disorders ; and 21
(9) Recognizes that rebates are an important instrument to 22
ensure affordability and access to pharmaceutical products by eligible 23
individuals and to maximize the use of rebates when available to ensure the 24
fiscal sustainability of the program . 25
26
23-61-1003. Definitions. 27
As used in this subchapter: 28
(1) “Acute care hospital” means a hospital that: 29
(A) Is licensed by the Department of Health under § 20 -9-30
201 et seq., as a general hospital or a surgery and general medical care 31
hospital; and 32
(B) Is enrolled as a provider with the Arkansas Medicaid 33
Program; 34
(2) “Birthing hospital” means a hospital in this state or in a 35
border state that: 36 As Engrossed: S4/7/25 SB527
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(A) Is licensed as a general hospital; 1
(B) Provides obstetrics services; and 2
(C) Is enrolled as a provider with the Arkansas Medicaid 3
Program; 4
(3) “Community bridge organization” means an a hospital, 5
federally qualified health center, or another organization that is authorized 6
by the Department of Human Services to participate in the economic 7
independence initiative or the health improvement initiative to: 8
(A) Screen and refer Arkansans to resources available in 9
their communities to address health -related social needs; and 10
(B) Assist eligible individuals identified as target 11
populations most at risk of disease and premature death and who need a higher 12
level of intervention to improve their health outcomes and succeed in meeting 13
their long-term goals to achieve independence, including economic 14
independence; 15
(4) “Cost sharing” means the portion of the cost of a covered 16
medical service that is required to be paid by or on behalf of an eligible 17
individual; 18
(5) “Critical access hospital” means an acute care hospital that 19
is: 20
(A) Designated by the Centers for Medicare & Medicaid 21
Services as a critical access hospital; and 22
(B) Is enrolled as a provider in the Arkansas Medicaid 23
Program; 24
(6) “Economic independence initiative” means an initiative 25
developed by the Department of Human Services that is designed to promote 26
economic stability by encouraging participation of program participants to 27
engage in full-time, full-year work, and to demonstrate the value of 28
enrollment in an individual qualified health insurance plan through 29
incentives and disincentives; 30
(7) “Eligible individual” means an individual who is in the 31
eligibility category created by section 1902(a)(10)(A)(i)(VIII) of the Social 32
Security Act, 42 U.S.C. § 1396a , as existing on January 1, 2025 ; 33
(8) “Employer health insurance coverage” means a health 34
insurance benefit plan offered by an employer or, as authorized by this 35
subchapter, an employer self -funded insurance plan governed by the Employee 36 As Engrossed: S4/7/25 SB527
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Retirement Income Security Act of 1974, Pub. L. No. 93 -406, as amended; 1
(9) "Federally qualified health center” means an entity as 2
defined by 42 C.F.R. § 405.2401, as existing on January 1, 2025, and that has 3
entered into an agreement with the Centers for Medicare & Medicaid Services 4
to meet Medicare program requirements under 42 C.F.R. § 405.2434, as existing 5
on January 1, 2025; 6
(9)(10) “Health improvement initiative” means an initiative 7
developed by an individual qualified health insurance plan or the Department 8
of Human Services that is designed to encourage the participation of eligible 9
individuals in health assessments and wellness programs, including fitness 10
programs and smoking or tobacco cessation programs; 11
(10)(11) “Health insurance benefit plan” means a policy, 12
contract, certificate, or agreement offered or issued by a health insurer to 13
provide, deliver, arrange for, pay for, or reimburse any of the costs of 14
healthcare services, but not including excepted benefits as defined under 42 15
U.S.C. § 300gg-91(c), as it existed on January 1, 2021 January 1, 2025; 16
(11)(12) “Health insurance marketplace” means the applicable 17
entities that were designed to help individuals, families, and businesses in 18
Arkansas shop for and select health insurance benefit plans in a way that 19
permits comparison of available plans based upon price, benefits, services, 20
and quality, and refers to either: 21
(A) The Arkansas Health Insurance Marketplace created 22
under the Arkansas Health Insurance Marketplace Act, § 23 -61-801 et seq., or 23
a successor entity; or 24
(B) The federal health insurance marketplace or federal 25
health benefit exchange created under the Patient Protection and Affordable 26
Care Act, Pub. L. No. 111 -148; 27
(12)(13) “Health insurer” means an insurer authorized by the 28
State Insurance Department to provide health insurance or a health insurance 29
benefit plan in the State of Arkansas, including without limitation: 30
(A) An insurance company; 31
(B) A medical services plan; 32
(C) A hospital plan; 33
(D) A hospital medical service corporation; 34
(E) A health maintenance organization; 35
(F) A fraternal benefits society; 36 As Engrossed: S4/7/25 SB527
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(G) Any other entity providing health insurance or a 1
health insurance benefit plan subject to state insurance regulation; or 2
(H) A risk-based provider organization licensed by the 3
Insurance Commissioner under § 20 -77-2704; 4
(13)(14) “Healthcare coverage” means coverage provided under 5
this subchapter through either an individual qualified health insurance plan, 6
a risk-based provider organization, employer health insurance coverage, or 7
the fee-for-service Arkansas Medicaid Program; 8
(14)(15) “Individual qualified health insurance plan” means an 9
individual health insurance benefit plan offered by a health insurer that 10
participates in the health insurance marketplace to provide coverage in 11
Arkansas that covers only essential health benefits as defined by Arkansas 12
rule and 45 C.F.R. § 156.110 and any federal insurance regulations, as they 13
existed on January 1, 2021 January 1, 2025; 14
(16) "Medical-loss ratio” means the percentage of premium income 15
that health insurers spend on medical care and quality improvement as opposed 16
to administration, marketing, and, if applicable, profit; 17
(15)(17) “Member” means a program participant who is enrolled in 18
an individual qualified health insurance plan; 19
(18)(A) ”Pharmacy rebate” means a discount, other price 20
concession, or a payment that is: 21
(i) Based on utilization of a prescription drug; and 22
(ii) Paid by a manufacturer or third party, directly 23
or indirectly, to a pharmacy benefits manager, pharmacy services 24
administrative organization, or pharmacy after a claim has been processed and 25
paid at a pharmacy. 26
(B) "Pharmacy rebate" includes without limitation 27
incentives, disbursements, and reasonable estimates of a volume -based 28
discount; 29
(16)(19) “Premium” means: 30
(A) A a monthly fee that is required to be paid by or on 31
behalf of an eligible individual to maintain some or all health insurance 32
benefits; and 33
(B) The amount paid by the Department of Human Services to 34
a health insurer on behalf of a program participant for cost -sharing 35
obligations in excess of or other than the program participant's cost -sharing 36 As Engrossed: S4/7/25 SB527
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obligations; 1
(17)(20) “Program participant” means an eligible individual who: 2
(A) Is at least nineteen (19) years of age and no more 3
than sixty-four (64) years of age with an income that meets the income 4
eligibility standards established by rule of the Department of Human 5
Services; 6
(B) Is authenticated to be a United States citizen or 7
documented qualified alien according to the Personal Responsibility and Work 8
Opportunity Reconciliation Act of 1996, Pub. L. No. 104 -193; 9
(C) Is not eligible for Medicare or advanced premium tax 10
credits through the health insurance marketplace; and 11
(D) Is not determined by the Department of Human Services 12
to be medically frail or eligible for services through a risk -based provider 13
organization; 14
(18)(21) “Risk-based provider organization” means the same as 15
defined in § 20-77-2703; and 16
(19)(22) “Small rural hospital” means a critical access hospital 17
or a general hospital that: 18
(A) Is located in a rural area; 19
(B) Has fifty (50) or fewer staffed beds; and 20
(C) Is enrolled as a provider in the Arkansas Medicaid 21
Program. 22
23
SECTION 2. Arkansas Code § 23 -61-1004(c)(2)(D), concerning the 24
administration of the Arkansas Health and Opportunity for Me Program, is 25
amended to read as follows: 26
(D) At least two (2) health insurers offer individual 27
qualified health insurance plans are offered in each county in the state. 28
29
SECTION 3. Arkansas Code § 23 -61-1004(d)(1), concerning a memorandum 30
of understanding specifying duties and obligations of each party in the 31
operation of the Arkansas Health and Opportunity for Me Program, is amended 32
to read as follows: 33
(d)(1) The Department of Human Services, the State Insurance 34
Department, and each of the individual qualified health insurance plans shall 35
enter into a memorandum of understanding that shall specify , consistent with 36 As Engrossed: S4/7/25 SB527
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this subchapter, the duties and obligations of each party in the operation of 1
the Arkansas Health and Opportunity for Me Program, including provisions 2
necessary to effectuate the purchasing guidelines and reporting requirements, 3
at least thirty (30) calendar days before the annual open enrollment period. 4
5
SECTION 4. Arkansas Code § 23 -61-1004(e)(2), concerning the duties of 6
the Department of Human Services under the Arkansas Health and Opportunity 7
for Me Act of 2021, is amended to read as follows: 8
(2)(A) Establish and maintain a process for premium payments, 9
advanced cost-sharing reduction payments, and reconciliation payments to 10
health insurers. 11
(B) The process described in subdivision (e)(2)(A) of this 12
section shall attribute any unpaid member liabilities as solely the financial 13
obligation of the individual member. 14
(C) The Department of Human Services shall not include any 15
unpaid individual member obligation in any payment or financial 16
reconciliation with health insurers or in a future premium rate . 17
(D) The Department of Human Services shall establish and 18
maintain a process for tracking all pharmacy rebates obtained by 19
participating health plans from pharmaceutical companies and ensure that an 20
amount equal to the pharmacy rebates is remitted to this state on a quarterly 21
basis; and 22
23
SECTION 5. Arkansas Code § 23 -61-1004(g), concerning the 24
administration of the Arkansas Health and Opportunity for Me Program, is 25
amended to add an additional subdivision to read as follows: 26
(3) A health insurer shall seek all available pharmacy rebates 27
from pharmaceutical companies for products covered through qualified health 28
plans participating in the Arkansas Health and Opportunity for Me Program. 29
30
SECTION 6. Arkansas Code § 23 -61-1004(h), concerning the 31
administration of the Arkansas Health and Opportunity for Me Act of 2021 32
relating to the authority for a block grant, is amended to read as follows: 33
(h)(1) The Governor shall request a block grant under relevant federal 34
law and regulations for the funding of the Arkansas Medicaid Program as soon 35
as practical if the federal law or regulations change to allow the approval 36 As Engrossed: S4/7/25 SB527
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of a block grant for this purpose. 1
(2)(A) The Governor shall request a waiver under relevant 2
federal law and regulations for a work requirement as a condition of 3
maintaining coverage in the Arkansas Medicaid Program as soon as practical if 4
the federal law or regulations change to allow the approval of a waiver for 5
this purpose. 6
(B) An eligible individual enrolled in the Arkansas Health 7
and Opportunity for Me Program shall: 8
(i) Comply with any and all federal and state work 9
requirements under the Arkansas Medicaid Program, including providing 10
required information to demonstrate compliance; and 11
(ii) Be exempt from the work requirement under this 12
section if the eligible individual: 13
(a) Volunteers twenty (20) hours or more per 14
week as determined by the Department of Human Services; 15
(b) Meets any combination of working and 16
participating in a work program for a total of twenty (20) hours or more per 17
week as determined by the Department of Human Services; 18
(c) Participates and complies with the 19
requirements of a workfare program; 20
(d) Receives unemployment compensation and 21
complies with work requirements that are a part of the unemployment 22
compensation system; 23
(e) Participates in a drug addiction or 24
alcoholic treatment or rehabilitation program; 25
(f) Provides care for a dependent child who: 26
(1) Has a serious medical condition or a 27
disability; or 28
(2) Is under six (6) years of age; or 29
(g) Is at least one (1) of the following: 30
(1) Medically certified as physically or 31
mentally unfit for employment; 32
(2) Pregnant; 33
(3) Under nineteen (19) years of age; or 34
(4) Over fifty-nine (59) years of age. 35
(C)(i) An individual who is not exempt under subdivision 36 As Engrossed: S4/7/25 SB527
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(h)(2)(B) of this section and who refuses to cooperate and declines to make 1
efforts to comply with the work requirements under this section shall have 2
coverage under the Arkansas Health and Opportunity for Me Program suspended 3
for the remainder of the plan year. 4
(ii) An individual who has coverage suspended under 5
subdivision (h)(2)(C)(i) of this section may regain active coverage under the 6
Arkansas Health and Opportunity for Me Program if he or she cooperates and 7
demonstrates a clear intention to comply with the work requirements under 8
this section. 9
(iii) The Department of Human Services shall not 10
make monthly premium payments or advanced cost -sharing reduction payments to 11
a health insurer during a period of suspended coverage of the individual 12
under this subdivision (h)(2)(C). 13
14
SECTION 7. Arkansas Code § 23 -61-1007(a), concerning the insurance 15
standards for individual qualified health insurance plans within the Arkansas 16
Health and Opportunity for Me Act of 2021, is amended to read as follows: 17
(a) Insurance coverage for a member enrolled in an individual 18
qualified health insurance plan shall be obtained, at a minimum, through 19
silver-level metallic plans as provided in 42 U.S.C. § 18022(d) and 42 U.S.C. 20
§ 18071, as they existed on January 1, 2021 January 1, 2025, that restrict 21
out-of-pocket costs to amounts that do not exceed applicable out -of-pocket 22
cost limitations. 23
24
SECTION 8. Arkansas Code § 23 -61-1007(c)(3)(A), concerning the 25
insurance standards for individual qualified health insurance plans, is 26
amended to read as follows: 27
(3)(A) Maintain a medical -loss ratio of at least eighty percent 28
(80%) eighty-five percent (85%) for an individual qualified health insurance 29
plan as required permitted under 45 C.F.R. § 158.210(c) 45 C.F.R. § 158.211, 30
as it existed on January 1, 2021 January 1, 2025, or rebate the difference 31
between the health insurer’s actual medical -loss ratio and eighty-five 32
percent (85%) to the Department of Human Services for members. 33
34
SECTION 9. Arkansas Code § 23 -61-1007(c)(5), concerning the insurance 35
standards for individual qualified health insurance plans, is amended to read 36 As Engrossed: S4/7/25 SB527
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as follows: 1
(5) Make reports to the Department of Human Services and the 2
Department of Health regarding quality and performance metrics in a manner 3
and frequency established by a memorandum of understanding. 4
5
SECTION 10. Arkansas Code § 23 -61-1009 is amended to read as follows: 6
23-61-1009. Sunset. 7
This subchapter shall expire on December 31, 2026 expires December 31, 8
2031. 9
10
SECTION 11. Arkansas Code § 23 -61-1011(h), concerning the Health and 11
Economic Outcomes Accountability Oversight Advisory Panel, is amended to read 12
as follows: 13
(h) The Department of Human Services shall produce and submit a 14
quarterly report incorporating the advisory panel's findings recommendations 15
to the President Pro Tempore of the Senate, the Speaker of the House of 16
Representatives, and the public on the progress in health and economic 17
improvement resulting from the Arkansas Health and Opportunity for Me 18
Program, including without limitation: 19
(1) Eligibility and enrollment; 20
(2) Participation in and the impact of the economic independence 21
initiative and the health improvement initiative of the eligible individuals, 22
health insurers, and community bridge organizations; 23
(3) Utilization of medical services; 24
(4) Premium and cost -sharing reduction costs; and 25
(5) Health insurer participation and completion. 26
27
SECTION 12. Arkansas Code § 26 -57-603(a), concerning the tax reports 28
relating to the insurance premium tax, is amended to read as follows: 29
(a) Each authorized, each formerly authorized, and each unauthorized 30
insurer as defined in § 23 -60-102(12) shall file with the Insurance 31
Commissioner on or before March 1 of each year a report in form as prescribed 32
by the commissioner showing, except as to wet marine and foreign trade 33
insurance as defined in § 26 -57-605(d), total direct premium income including 34
policy, membership, and other fees, and all other considerations for 35
insurance, from all kinds and classes of insurance, whether designated as 36 As Engrossed: S4/7/25 SB527
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premium or otherwise, including all amounts paid for cost sharing by the 1
Department of Human Services to a health insurer under the Arkansas Health 2
and Opportunity for Me Act of 2021, § 23 -61-1001 et seq., written by it 3
during the preceding calendar year on account of policies and contracts 4
covering property, subjects, or risks located, resident, or to be performed 5
in this state, with proper proportionate allocation of premium as to the 6
persons, property, subjects, or risks in this state insured under policies or 7
contracts covering persons, property, subjects, or risks located or resident 8
in more than one (1) state, after deducting from the total direct premium 9
income dividends and similar returns paid or credited to policyholders other 10
than as to life insurance, applicable cancellations, returned premiums, the 11
unabsorbed portion of any deposit premium, and the amount of reduction in, or 12
refund of, premiums allowed to industrial life policyholders for payment of 13
premiums directly to an office of the insurer. 14
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/s/Irvin 16
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APPROVED: 4/17/25 19
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