AB 860

This bill allows nonprofit agricultural organizations to provide health benefit

coverage to its members and its members' families and exempts the health benefit

coverage and the nonprofit agricultural organization offering the health benefit

coverage from the application of insurance law. Under the bill, “nonprofit

agricultural organization” is defined to mean a member-directed agricultural

organization whose purpose is to represent, protect, and enhance the business,

economic, social, and educational interests of members located throughout the state

and to which certain conditions apply including that the organization is exempt from

federal tax, that the organization is organized as a cooperative in this state, that the

organization was organized prior to January 1, 1922, that the organization collects

annual dues from its members, that the organization is governed by a board of

directors that is elected by its members, and that the organization has a wholly

owned subsidiary through which health benefit coverage may be administered.

If a nonprofit agricultural organization offers to provide health benefit

coverage, the bill requires the nonprofit agricultural organization to satisfy certain

criteria. First, a nonprofit agricultural organization must provide written notice to

its members prior to enrollment that any health benefit coverage provided by the

nonprofit agricultural organization is not health insurance and that the health

benefit coverage alone may not satisfy individual or employer insurance coverage

requirements under federal law. Further, a nonprofit agricultural organization must

reinsure its risks under the health benefit coverage it provides with a company

authorized to transact reinsurance business in this state. Additionally, the bill

prohibits nonprofit agricultural organizations from taking certain action with

respect to the health benefit coverage that it provides. The bill prohibits nonprofit

agricultural organizations from excluding or refusing to provide coverage for

services provided by a health care provider if the health benefit coverage provided

by the nonprofit agricultural organization covers those services when provided by a

physician. Further, the bill prohibits nonprofit agricultural organizations from

imposing a preexisting condition exclusion for any condition for a period of more than

six months if the health benefit coverage would otherwise include coverage of the

condition.