SB232INTRODUCED
Page 0
SB232
6BQBZ3Z-1
By Senators Orr, Williams, Sessions, Stutts, Carnley, Kelley,
Roberts
RFD: Banking and Insurance
First Read: 19-Mar-24
1
2
3
4
5
6 6BQBZ3Z-1 01/12/2024 FC (L) ma 2024-171
Page 1
First Read: 19-Mar-24
SYNOPSIS:
Under existing law, a nonprofit organization is
not authorized to offer health benefits to its members
and their families under a law that specifies that the
organization is not an insurer or in the business of
insurance.
This bill would authorize a nonprofit
agricultural organization to offer health benefits to
its members and their families. The bill would specify
that the nonprofit agricultural organization would not
be engaged in the business of health insurance.
A BILL
TO BE ENACTED
AN ACT
Relating to health benefits offered by a nonprofit
organization; to authorize a nonprofit agricultural
organization to offer health benefits to its members and their
families under certain conditions; and to specify that the
nonprofit agricultural organization would not be engaged in
the business of health insurance.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. DEFINITIONS. For purposes of this act, the
following words have the following meanings:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 SB232 INTRODUCED
Page 2
following words have the following meanings:
(1) NONPROFIT AGRICULTURAL ORGANIZATION. An
organization that meets all of the following:
a. Is exempt from federal income taxation under Section
501(a), Internal Revenue Code of 1986, as an organization
described by Section 501(c)(5).
b. Is domiciled in this state.
c. Was in existence prior to 1940.
d. Is composed of members who are residents of at least
98 percent of the counties in this state.
e. Collects annual dues from its members.
f. Was created to promote and develop the most
profitable and desirable system of agriculture and the most
wholesome and satisfactory conditions of rural life in
accordance with its articles of organization and bylaws.
(2) NONPROFIT AGRICULTURAL ORGANIZATION HEALTH
BENEFITS. Health benefits that meet all of the following
conditions:
a. Are sponsored by a nonprofit agricultural
organization or an affiliate of the organization.
b. Are offered only to either of the following:
1. Members of the nonprofit agricultural organization.
2. Family members of members of the nonprofit
agricultural organization.
c. Are not provided through an insurance policy or
other product the offering or issuance of which is regulated
as the business of insurance in this state.
d. Are deemed by the nonprofit agricultural
organization to be important in assisting its members to live
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56 SB232 INTRODUCED
Page 3
organization to be important in assisting its members to live
long and productive lives.
Section 2. A nonprofit agricultural organization or an
affiliate of the organization may offer in this state
nonprofit agricultural organization health benefits.
Section 3.(a) A nonprofit agricultural organization
that offers nonprofit agricultural organization health
benefits shall provide to an individual applying for nonprofit
agricultural organization health benefits written notice that
the benefits are not provided through an insurance policy or
other product the offering or issuance of which is regulated
as the business of insurance in this state.
(b) An individual shall be required to sign and return
to the nonprofit agricultural organization the notice
described by subsection (a) before the individual may enroll
in nonprofit agricultural organization health benefits. The
nonprofit agricultural organization shall do both of the
following:
(1) Maintain a copy of the signed written notice for
the duration of the term during which the nonprofit
agricultural organization health benefits are provided to the
individual.
(2) At the request of the individual, provide a copy of
the written notice to the individual.
Section 4. Notwithstanding any provision of Title 27 or
Article 6 of Chapter 20 of Title 10A of the Code of Alabama
1975, for the purposes of offering nonprofit agricultural
organization health benefits, a nonprofit agricultural
organization that acts in accordance with this act is not a
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84 SB232 INTRODUCED
Page 4
organization that acts in accordance with this act is not a
health insurer and is not engaging in the business of health
insurance in this state.
Section 5. A nonprofit agricultural organization that
offers nonprofit agricultural organization health benefits
under this act may contract with an entity or entities
authorized to engage in the business of insurance in this
state that is not under common control with the nonprofit
agricultural organization in order to transfer to the entity
or entities all or a portion of the organization's risks
arising from nonprofit agricultural organization health
benefits offered under this act.
Section 6. All laws or parts of laws which conflict
with this act are repealed.
Section 7. This act shall become effective June 1,
2024.
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99