HB477 Summary

• Authorizes nonprofit agricultural organizations meeting specific criteria (501(c)(5) tax-exempt status, established before 1940, members in 98% of Alabama counties) to offer health benefits to members and their families.

• Required health benefits coverage includes ambulatory patient services, hospitalization, emergency services, laboratory services, mental health and substance abuse disorder services, and prescription drugs, with minimum annual limits of $2,000,000 per enrollee.

• Health benefits must be sold only by licensed insurance producers who are employees of the organization, independent agents exclusively authorized for nonprofit agricultural organizations, or authorized agents from similar out-of-state organizations.

• Organizations must designate an ombudsman for member complaints, file annual actuarial opinions certifying adequate reserves, contract with licensed insurers to transfer risks, and ensure prompt payment for services rendered.

• Premiums are taxed at 1.3% annually, payable biannually to the Department of Insurance, with the organization exempt from other taxes and licenses; act becomes effective June 1, 2025.