Committee approves Farm Bureau-style nonprofit agricultural health benefit plan after multiple amendments

Representative Faulkner, sponsor of House Bill 477, told the House Health Committee the measure would create a nonprofit agricultural health benefit option intended to lower health-care costs for farmers and small business owners. After extensive debate and several amendments the committee voted to give the bill a favorable report as amended.

Faulkner said 10 other states have enacted similar options and that those plans can reduce health-care costs by 30% to 60% in some instances. He told members the bill had been revised repeatedly following conversations with interested parties and hospital representatives.

Committee members considered multiple amendments during the session. Representative Hogue Jones’s amendment (KHZMWUUDash1) clarified that policies must be sold by an insurance producer licensed to sell accident and health insurance in Alabama; the committee adopted that as a friendly amendment. Representative Hope Jones brought an amendment to require annual reporting to the Department of Insurance (filed by March 1) that would list the number of individuals covered; several members opposed that disclosure and the motion to table the amendment carried, so the reporting requirement was not adopted.

Representative Warren offered an amendment requiring 60 days’ notice to members and in-network providers before imposing annual or lifetime benefit caps; after debate and a roll-call vote the motion failed. Sponsors noted that the plan as drafted does not include annual caps, and Faulkner cited ongoing negotiations with hospitals about a separate agreed amendment.

Representative Brignard offered an amendment prohibiting individual post-claim medical underwriting and barring cancellation, nonrenewal, premium increases or modification for reasons of a medical event while coverage remains in effect; members described that change as a significant consumer protection and the committee adopted it by voice vote. Representative Saros’s amendment moved premium tax collection administration from the Department of Revenue to the Department of Insurance and passed. The committee also accepted an amendment clarifying emergency out-of-network payment rules agreed with hospitals and another amendment to explicitly cover mental health, substance use disorder and prescription drugs.

There was substantive discussion about underwriting, reinsurance and oversight. Faulkner and other supporters said underwriting ability is central to offering lower-cost options; Faulkner said the Tennessee plan that served as a model had an approximately 85% acceptance rate. Opponents questioned whether the Department of Insurance should be given enforcement authority over a self-funded plan; an amendment to vest enforcement with the Department of Insurance was advanced and passed on a roll call after debate about the department’s authority and the bill’s self-funded structure.

After the package of amendments, Representative Shireen moved, and Representative Paramore seconded, to report the bill favorably as amended; the chair announced the bill "passes" and the committee closed action on the measure.

The bill as amended includes explicit consumer protections against post-claim underwriting and cancellation for medical events, affirmative mental-health and prescription coverage provisions, a shift of premium-tax administration to the Department of Insurance, and an enforcement clause assigning oversight to the Department of Insurance. An amendment to require annual reporting of covered lives to the Department of Insurance was tabled and not adopted.