HB477INTRODUCED
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HB477
4U56W33-1
By Representatives Faulkner, Stadthagen, Colvin, Butler,
Easterbrook, Hammett, Shirey, Mooney, Harrison, Treadaway,
Lamb, Stubbs, Robertson, Standridge, Sells, Brown, Wood (D),
Bolton, Ingram, Lawrence, Smith, Starnes, Jackson, DuBose,
Crawford, Gidley, Baker, Estes, Hurst, Yarbrough, Bedsole,
Hassell, Whorton, Hulsey, Kiel, Moore (P), Oliver, Stringer,
Rehm, Fidler
RFD: Health
First Read: 20-Mar-25
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11 4U56W33-1 03/20/2025 JC (L)LG 2025-1349
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First Read: 20-Mar-25
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 also
specify that the nonprofit agricultural organization
would not be engaged in the business of health
insurance, and would specify health care benefits that
must by offered.
This bill would require a nonprofit agricultural
organization to create a complaint system for members
receiving health benefits.
This bill would also impose a tax measured by
premiums received by a nonprofit agricultural
organization.
A BILL
TO BE ENTITLED
AN ACT
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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; to include required
benefits; to provide for a complaint system; to specify that
the nonprofit agricultural organization would not be engaged
in the business of health insurance; and to provide for the
imposition of a tax on premiums.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. For purposes of this act, the following
words have the following meanings:
(1) 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
long and productive lives.
(2) NONPROFIT AGRICULTURAL ORGANIZATION. An
organization that meets all of the following:
a. Is exempt from federal income taxation under 26
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a. Is exempt from federal income taxation under 26
U.S.C. § 501(a), as an organization described by 26 U.S.C. §
501(c)(5).
b. Is domiciled in this state.
c. Was in existence prior to the year 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.
Section 2. (a) A nonprofit agricultural organization or
an affiliate of the organization may offer in this state
health benefits.
(b) Health benefits offered under this act shall
include coverage for all of the following:
(1) Ambulatory patient services.
(2) Hospitalization.
(3) Emergency services.
(4) Laboratory services.
(c) Health benefits offered under this act may only be
sold by the following:
(1) An employee of the nonprofit agricultural
organization or its affiliates.
(2) Agents who are employees or independently exclusive
of an organization authorized to sell insurance products that
may only be sold to members of a nonprofit agricultural
organization.
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organization.
(3) Employees or agents of a nonprofit agricultural
organization of another state which is substantially similar
to the nonprofit agricultural organization as defined in this
act who are under contract with the nonprofit agricultural
organization as defined in this act to underwrite or service
the health benefits offered pursuant to this act.
(d) Health benefits may not be sold by a broker, agent,
benefits coordinator, or another individual who is not
described in subdivisions (c)(1) through (3).
Section 3. (a) A nonprofit agricultural organization
that offers health benefits shall provide to an individual
applying for 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 in subsection (a) before the individual may enroll
in 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 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 health benefits, a
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1975, for the purposes of offering health benefits, a
nonprofit agricultural 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. In order to purchase health benefits offered
by a nonprofit agricultural organization under this act, an
individual shall certify that he or she does not have the
option to participate in an employer-sponsored health plan, or
that he or she has the option to participate in an
employer-sponsored health plan but the cost to the individual
is more than nine percent of his or her household income.
Section 6. A nonprofit agricultural organization that
offers health benefits shall annually file with the Department
of Insurance a written, signed opinion of a qualified actuary
that certifies that the plan reserves of the nonprofit
agricultural organization and its affiliates are adequate and
conform to the appropriate actuarial standards of practice
that govern health benefits.
Section 7. (a) In consultation with the Department of
Insurance, a nonprofit agricultural organization that offers
health benefits shall designate an individual to serve as an
ombudsman to respond to concerns from nonprofit agricultural
organization members pursuant to a complaint procedure to be
established by the nonprofit agricultural organization which
is substantially similar to the customer complaint procedure
under the Department of Insurance.
(b) The Department of Insurance shall have the
authority to review and comment on any complaint received by
the Department of Insurance from a member enrolled in health
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the Department of Insurance from a member enrolled in health
benefits, and the complaint shall be forwarded by the
department to the ombudsman established under subsection (a).
Section 8. A nonprofit agricultural organization that
offers health benefits under this act shall 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 the health benefits offered
under this act.
Section 9. (a) A nonprofit agricultural organization
providing health benefits shall ensure that all covered
services are provided by in-network providers whenever
possible.
(b) In emergency situations where an out-of-network
provider delivers care, the nonprofit agricultural
organization shall pay the out-of-network provider one of the
following, less the enrollee's in-network cost-sharing amount:
(1) The median in-network amount, as determined by the
Department of Insurance, for the core-based statistical area
in which the medical services were performed.
(2) For care delivered in a location outside of a
core-based statistical area, the median in-network amount for
the county as determined by the Department of Insurance.
(c) For nonemergency services, a nonprofit agricultural
organization is solely liable for payment of fees to a
nonparticipating provider of covered non-emergency services
provided to an enrollee in accordance with the coverage terms
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provided to an enrollee in accordance with the coverage terms
of the health benefits, and the enrollee is not liable for
payment of fees to a nonparticipating provider, other than
applicable copayments, coinsurance, and deductibles for
covered nonemergency services that are:
(1) Provided in a facility that has a contract for the
nonemergency services with the nonprofit agricultural
organization providing health benefits which the facility
would otherwise be obligated to provide under that contract;
and
(2) Provided when the enrollee does not have the
ability or opportunity to choose a health care professional
participating in the nonprofit agricultural organization
health benefits at the facility who is otherwise available to
treat the enrollee.
Section 10. Any health benefits offered by a nonprofit
agricultural organization shall ensure prompt payment for
services rendered to enrollees. Notwithstanding Section 4, a
nonprofit agricultural organization providing health benefits
shall be subject to the provisions of Section 27-1-17, Code of
Alabama 1975.
Section 11. (a) Premiums collected under this act shall
be taxed at the rate of 1.3 percent per annum based on the
premiums collected by the nonprofit agricultural organization.
The return and payment of the tax shall be due to the
Department of Revenue on a biannual basis and shall be
remitted to the department on or before the 20th day of the
month following the preceding six months for premiums
collected.
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collected.
(b) The tax described in subsection (a) is exclusive
and shall be in lieu of all other taxes and licenses. No
license or privilege tax may be imposed by a county or
municipality on a nonprofit agricultural organization that is
subject to the tax described in subsection (a), and a
nonprofit agricultural organization and its affiliates that
are subject to the tax described in subsection (a) shall be
exempt from income taxes under Chapter 18 of Title 40, Code of
Alabama 1975, or any other law levying income taxes.
(c) Taxes collected under this section shall be
collected and administered by the Department of Revenue
pursuant to rules adopted by the department for that purpose.
(d) Taxes collected under this section, less the costs
of administration by the department not to exceed two percent
of collections, shall be deposited in the State Treasury and
credited to the State General Fund.
Section 12. This act shall become effective on June 1,
2025.
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