AB 448

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 offer health benefit coverage to its members in every county in the state. 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 and must annually file with the commissioner of insurance a signed opinion of a qualified actuary that the financial reserves of the nonprofit agricultural organization and any affiliated entities of the nonprofit agricultural organization are sufficient and conform to appropriate actuarial standards. 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. Finally, the bill requires a nonprofit agricultural organization to adopt a process for members to file and resolve complaints related to health benefit coverage that is, to the greatest extent practicable, consistent with the process for health insurance consumers to file and resolve complaints related to health insurance coverage with the Office of the Commissioner of Insurance.