House committee approves bill allowing nonprofit agricultural groups to offer self-funded health plans with amendments

A House committee on an agricultural health plan bill approved House Bill 477 after extensive debate and several amendments, advancing a proposal that would let nonprofit agricultural organizations offer self‑funded health benefit plans to their members.

Sponsor Representative Chris Faulkner told the committee the bill responds to rising health-care costs facing farmers and small business owners and modeled elements on plans in other states. "These health plans have the potential to save 30 to 60% on the cost of health care coverage," Faulkner said, and he said the bill is ‘‘by far the most comprehensive’’ of similar proposals he reviewed.

The bill’s sponsor and committee members discussed several amendments during the session. Supporters said the measure would expand affordable coverage options for farmers; critics warned that too much regulation could limit the plan’s flexibility. Representative Faulkner repeatedly cautioned that adding statutory requirements risks reducing the program’s ability to offer lower‑cost options over time.

Key changes and votes

- Licensing: An amendment (u‑1) requiring that the policy be sold by an insurance producer licensed to sell accident and health insurance in the state was offered by Representative Hogue Jones and approved by the committee on a voice vote. Representative Hogue Jones described the change as a clarification and a friendly amendment.

- Annual reporting: A proposal requiring the nonprofit agricultural organization to file an annual report with the Department of Insurance listing the number of covered individuals (identified in committee papers as 63‑1) was contested. Representative Faulkner said he did not have the amendment and opposed adding the disclosure to law for self‑funded plans. The committee voted to table the reporting amendment by voice; the amendment was tabled.

- Notice for benefit caps (failed): Representative Warren moved an amendment that would have required 60‑day notice to members and in‑network providers before imposing or amending annual or lifetime benefit caps. Faulkner and others said the bill does not currently include annual caps and cautioned the notice requirement could be burdensome. The motion failed on a roll call vote (Aye: Representative Lee; Representative Letzkam; Representative Hall; Representative Warren; Representative Gray; Representative Rafferty; Representative Holt Jones — 7. No: Representative Sorrells; Representative Mooney; Representative Marcus; Representative Paramore; Representative Rigsby; Representative DeBose; Representative Showery; Representative Brignard — 8).

- Ban on post‑claim medical underwriting (passed): An amendment (9bm1) replacing language to prohibit individual post‑claim medical underwriting and premium increases based on a medical event while coverage remains in effect was introduced and adopted by voice. Representative Brignard described the change as ‘‘a great benefit for our members.’’

- Premium‑tax and enforcement changes (passed): The committee approved an amendment moving collection of the premium tax administration to the Department of Insurance, and later approved language that the Department of Insurance shall enforce the act. Representative Soros (who offered the premium‑tax amendment) and Representative Holt Jones (who offered the enforcement language) both secured committee approval for their proposals after debate about whether the Department of Insurance typically regulates self‑funded plans.

- Emergency out‑of‑network payments (passed): The committee adopted an amendment (RW‑1) to set a floor for payments to out‑of‑network providers who deliver emergency care: payment of either the median in‑network rate or 80% of the maximum allowable charge, less enrollee in‑network cost‑sharing. The sponsor described the amendment as an agreed change worked out with hospital interests.

- Behavioral‑health and prescription coverage (passed): An amendment to require coverage for mental‑health, substance‑use disorder and behavioral‑health treatment and prescription drugs under the plans was adopted by voice.

Final passage

After adopting the amendments, the committee voted to report House Bill 477 favorably as substituted. Committee minutes record the final voice vote as "aye," and the chair announced the bill passes.

What the bill would do and outstanding issues

The bill creates a framework for nonprofit agricultural organizations to provide self‑funded health benefit contracts to members. Supporters pointed to plans in other states and said the model can offer lower premiums to participating members; Representative Faulkner said the Tennessee plan has had an 85% acceptance rate for applicants and cited that as part of the reason the model can work. Opponents and some members pressed on oversight and consumer protections: whether the Department of Insurance should have enforcement authority for a self‑funded plan, what reporting is appropriate, and how notice requirements or caps would be handled in contracts rather than statute.

The committee’s actions leave several matters to implementers and negotiators: which contractual provisions will be required in vendor/TPA agreements, how the Department of Insurance will exercise enforcement over a self‑funded structure, and whether the sponsor will accept additional agreed‑upon changes in subsequent legislative steps.

Quotes

"We did have a public hearing on this last week... we know, how important agriculture and farming is to this state," Representative Chris Faulkner said as he introduced the bill and the need he said it addresses.

"These health plans have the potential to save 30 to 60% on the cost of health care coverage," Faulkner said when describing the model used in other states.

"I consider that a great benefit for our members," Representative Brignard said after the committee adopted the amendment prohibiting post‑claim medical underwriting.

Representative Hall asked the sponsor, "Have you had any conversation relative to preexisting conditions in terms of your health benefit plan?" Faulkner replied that the ability to underwrite is central to offering a lower‑cost option and noted the Tennessee plan’s acceptance rate: "They have an 85 percent acceptance rate in the Tennessee plan... 85 percent of the people who apply get covered."

What to watch next

The committee advanced the bill to the next stage of the legislative process; the full chamber will determine whether to consider the measure and whether additional amendments are made. Several implementation details — enforcement role, reporting requirements, and contract‑level notice provisions — were debated and may resurface in future committee work or during floor debate.

Sources and limitations

This report is based on the committee transcript and voice and roll‑call votes recorded during the meeting. Where a roll‑call was recorded in the transcript, this article reports the names and votes as spoken on the record. Where votes were taken by voice, the transcript records the committee’s voice vote outcome but does not list individual roll‑call votes.