Bill allowing Alfa health benefit plans passes Alabama Senate

The Alabama Senate passed a bill Thursday to allow the state’s dominant agricultural organization to offer its members health benefit plans.

HB 477, sponsored by Rep. David Faulkner, R-Mountain Brook, would allow the Alabama Farmers Federation (Alfa), the state’s dominant agricultural organization, to offer a health plan that is outside of state insurance regulations and only available to its members. The bill passed 30-2 and heads to the governor.

Supporters said the legislation would help farmers and other self-employed agricultural workers who do not have access to employer-sponsored plans to get more affordable coverage.

“If we don’t do something to help our young farmers out, we’re not going to have any because they’ve got to go to work somewhere else just to get insurance,” said Sen. Jack Williams, R-Wilmer.

The bill specifies that Alfa would not be engaged in the business of health insurance and imposes a 1.3% tax on premiums. Alfa’s health benefits must include coverage for ambulatory patient services; hospitalization; emergency services; laboratory services; mental health and substance abuse disorder services and prescription drugs. Benefits or services covered under a health benefit would not be subject to an annual limit of less than $2 million per year per enrollee.

“This is a freedom-of-contract issue … it’s a simple issue in my in my head, as far as the freedom to contract, freedom to do what you want, and have a an organization enter into this type of arrangement with its members for some form of health coverage,” said Sen. Arthur Orr, R-Decatur, who is handling the bill in the Senate.

Democrats tried to amend the bill on the floor to align the proposed health benefit plan more with health insurance, but each amendment was voted down due to concerns about keeping the price of the health plans low.

Sen. Linda Coleman-Madison, D-Birmingham, who said she was concerned about denied claims and how consumers could appeal such denials, offered an amendment that would have authorized the Alabama Department of Insurance to “enforce” the bill in order to offer consumer protection. Similar language was added in an amendment to the original House bill but later removed from it.

“What happens to the health services when an emergency claim is denied? Who do the farmers go to get some kind of mediation?” asked Coleman-Madison. The amendment failed on a 9-24 vote.

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Sen. Bobby Singleton, D-Greensboro, raised concerns about pre-existing conditions and the potential impact on farmers. He said that farmers may work around substances like ammonia, which may negatively impact their health.

“[Farmers] want to get insured, because they all are supporting this plan, but they going to be in for some rude awakening when they go there and get their record check, and now they have some kind of lung disease or cancer or something, and then they’re going to be told that they can’t get insurance,” Singleton said.

His amendment failed on a 9-23 vote.

Singleton offered another amendment to raise the premium tax from 1.3% to 1.6% for each year based on the premiums collected.

“I don’t think it will kill them, that they could pay that back to the people of the state of Alabama,” Singleton said.

Orr opposed the amendment, saying that he thinks “it’s important to keep tax rate low and make this an affordable policy for people that want to participate.” The amendment failed on a 8-25 vote.

When asked after the bill passed if he was concerned the plan would not be regulated like health insurance or that it could negatively impact a policyholder, Williams said that “some coverage is better than none.”

“If you don’t get the whole foot in, you get eight inches in, and it’s working, it’s better than what you got,” Williams said.

The bill now heads to Gov. Kay Ivey for her signature.