California’s legislators expressed concern about the relaxed rules for AHPs and particularly wanted to protect the smallest businesses from the perceived risk of having inadequate coverage or signing on with a plan that was poorly funded. or didn’t include essential benefits, see  our webpage for details.

which modifies existing law by:

• redefining “eligible employee” to specifically exclude sole proprietors and their spouses and partners and their spouses when there are no other employees in the business.
  • These excluded individuals are not permitted to purchase small group health plans and instead must purchase coverage in the individual market.
  • Get instant quotes for the Individual market Direct or Covered CA  Quotit.com

From a practical standpoint, this means that “owner-only” groups where there are no other employees or where the spouse is the only other employee, will not be able to purchase coverage in the small group market nor in any current AHP or in any AHP established in the future.

However, SB 1375 specifically excludes members of AHPs known as MEWAs (Multiple Employer Welfare Arrangements) from the “eligible employee” redefinition and as such SB 1375 does not impact MEWAs or their members.  ^{Claremont Companies} * .  ^{Insure Me Kevin.com}  *  ^{DOL Final rule 29 CFR 2510}* ^{CA fight against Trump sabatoge} * ^{CA SB 1375}