MONTGOMERY — Legislation allowing the Alabama Farmers Federation (ALFA) to begin offering health plans to its members cleared the House Health Committee on Tuesday, setting it up for an expected House vote on Thursday.
House Bill 477 (HB477), sponsored by State Rep. David Faulkner (R-Hoover), would allow a "nonprofit agricultural organization" to offer health benefits to its members and their families. The bill does not mention ALFA specifically. However, ALFA is the only state organization meeting the bill's criteria. It would also specify that the nonprofit agricultural organization "would not be engaged in the business of health insurance." It also levies a 1.3% tax on premiums.
After passing the House, the bill would still need deliberation and approval in the Senate before becoming law.
During a public hearing last week, lawmakers generally seemed amenable to the bill. However, many wanted more explicit language eliminating potential ambiguity in what would and would not be covered under the proposed ALFA health plans.
During Tuesday's committee meeting, Faulkner accepted multiple amendments while several others failed to receive a favorable vote.
"We know how important agriculture and farming is to this state," Faulkner told the committee. "And 10 other states have already passed this option that I have brought before this committee."
He continued, "These 10 other states are not even close to what you have in the bill before you, in terms of the regulation, in terms of the comprehensiveness of it. This bill before you, with a lot of time and effort in talking to interested parties and trying to address concerns, we have made the most comprehensive farm bureau plan."
Faulkner accepted several amendments to the bill, albeit begrudgingly, to assuage the concerns of some groups, namely the Alabama Hospital Association. He also noted multiple times that the current bill contains more regulation and bureaucracy than the other 10 states that have enacted similar legislation.
"We have continued to do what we've done for the last several months, and we agreed to some other amendments," Faulkner continued. "I think the bill as is before you is in great shape. I don't think it needs any amendments. But still, to address concerns like we've done, we have."
"I just caution you; we don't want to cause a lot of limitations on the ability to provide this type of affordable health plan option for the men and women, these farmers who are sitting here today."
Of the eight amendments proposed by committee members, two were voted down.
The approved amendments include:
- An amendment by State Rep. Frances Holk-Jones (R-Foley) requiring that insurance policies be sold only by individuals who are licensed to do so in the state.
- An amendment by State Rep. Bryan Brinyark (R-Northport) stating that a person's healthcare contract could not be subject to post-claim medical underwriting while coverage remains in effect. It also states a person could not be subject to cancellation, nonrenewal, modification, or increase in premium due to a medical event.
- An amendment by State Rep. Jeff Sorrells (R-Hartford) stating that premium taxes collected, minus the department's administrative costs, not to exceed 2% of collections, shall be deposited in the State Treasury and credited to the Insurance Department Fund.
- An amendment by Holk-Jones requiring the Department of Insurance to enforce the bill's provisions. Faulkner stated the amendment was unfriendly. However, the committee narrowly voted to approve it.
- An amendment by State Rep. Mark Shirey (R-Mobile) requiring the healthcare plan to cover out-of-network emergencies with either the median in-network rate or 80% of the maximum allowable charge for any service not covered by the healthcare plan.
- An amendment by State Rep. Neil Rafferty (D-Birmingham) clarifying that the healthcare plans would cover lab services, mental health, substance abuse and prescription drug costs.
The failed amendments include:
- An amendment by Holk-Jones requiring an annual report to the Department of Insurance on the number of people participating in the non-profit healthcare plan.
- An amendment by State Rep. Pebblin Warren (D-Tuskegee) writing into the bill that any agricultural organization deploying healthcare plans could not amend or place a cap on coverage without 60 days' notice.
Faulkner stated that some of the amendments were unfriendly because he either believed that they grew bureaucracy for the health plans or that specific issues could be addressed in health care contracts and did not need to be written into law.
After voting on all the amendments, the committee unanimously voted to approve the amended bill.
HB 477 must now clear the House floor before it can go to the Senate for deliberation.
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