Alabama Gov. Kay Ivey has signed legislation that will allow nonprofit agricultural organizations to offer health benefits in a format that would be exempt from the state’s insurance regulations, a move highly criticized by BCBS Alabama.
While not classified as traditional health insurance, the benefits offered under the bill would still be required to cover a broad range of services, including hospitalization, emergency services, prescription drugs, and mental healthcare.
Under the legislation, potential members will need to acknowledge that the health benefits they are receiving are not insurance and are not subject to typical insurance laws. The nonprofit organizations offering these benefits would be permitted to transfer some or all of the risks associated with providing health benefits by contracting with payers. The health benefits plans would also have to meet minimum benefit levels, with an annual coverage cap of at least $2 million per enrollee.
The bill is set to take effect on June 1 and includes provisions for oversight, such as requiring the nonprofit organizations to submit actuarial opinions on their financial solvency to the state and to establish complaint procedures for enrollees. The bill also prohibits post-claim underwriting, meaning members cannot be denied or face increased premiums due to medical conditions that arise after enrollment. The Alabama Farmers Federation (ALFA) backed the legislation.
“ALFA’s simple goal is to limit the people in their plan to younger healthy people – leaving those they deny left to pay more for the coverage that they desperately need,” BCBS Alabama wrote in Yellowhammer News in February.
BCBS also noted that the state’s current health insurance market is open to competition from all payers, so other organizations could now move to circumvent state regulations.
“We don’t have to speculate about the positive impact of health plans. Ten other states have passed similar legislation. Tennessee Farm Bureau has offered health plan coverage since 1947,” ALFA said in a previous statement shared with Becker’s. “This coverage provides all essential health benefits; has shown no negative impact on the health insurance market or premiums for those outside the plan; and has a strong record of persistence and member satisfaction. While prescreening is key to the affordability of health plans, it’s important to note health plan contracts are evergreen — meaning once a member is approved, they cannot be cancelled for health reasons.”
