House approves bill allowing Farmers Federation to offer members a self‑funded health plan

The Alabama House of Representatives on April 9 approved HB 477, a bill authorizing the Alabama Farmers Federation (commonly called the Farm Bureau) to offer a self‑funded health plan to its members, with statutory guardrails that sponsors say exceed protections in similar plans in other states.

Supporters said the plan aims to help farmers and other self‑employed people who fall into a coverage gap — earning too much for Medicaid but too little to afford unsubsidized private insurance. Representative Chris Faulkner, the bill sponsor, said the plan “is not a plan for everyone. This is a plan that is offered to the members of the Farmers Federation.”

House members who backed the bill described it as a targeted option that has operated in other states for decades and produced cost savings. Faulkner said the substitute before the House added mental‑health and substance‑use benefits, prescription drug coverage language, a licensed‑agent sales requirement, protections to prevent cancellation or premium increases after an individual health event, emergency out‑of‑network payment rules and an ombudsman/complaint process tied to the Alabama Department of Insurance. “We have put in the federal No Surprises Act and prompt pay law,” Faulkner said during debate.

Opponents pressed for stronger outside oversight of a self‑funded program and asked whether the Department of Insurance could or should be given explicit enforcement authority. Representative Laura Hall and others urged keeping a written enforcement role for the Department of Insurance; Faulkner argued the department does not regulate self‑funded plans and that the bill already contains more consumer protections than other states’ laws. Representative Angelique Vann pressed whether the plan would be available only to Farm Bureau members; Faulkner and other supporters confirmed eligibility is limited to members.

The House approved the substitute and final passage. The substitute added the benefits and oversight language described by the sponsor and included a floor amendment that set a $2,000,000 per‑enrollee floor for aggregate annual benefits language at hospitals’ request. House action: substitute adopted, then final passage (vote recorded 98 ayes, 1 nay).

Supporters said the plan could substantially lower premiums for eligible members, citing other states’ experience with savings commonly described as 30–60% in some cases. Representatives on the floor repeatedly emphasized the bill’s limits: it does not use state funds, will be offered only to Farm Bureau members, and is structured as a self‑funded benefit plan rather than traditional insurance.

The House debate also produced several amendments and concessions that sponsors said addressed hospital and insurer concerns, including an independent reinsurance requirement, actuarial reserve reporting and explicit patient protections for emergency out‑of‑network care. Several members called for follow‑up work to monitor implementation and to consider additional consumer safeguards later.

HB 477 now moves to the Senate for consideration.