The bill authorizes nonprofit agricultural organizations to provide health benefits to their members and their families under specific conditions, clarifying that these organizations are not classified as health insurance providers. Key provisions include the requirement that health benefits must be sponsored by a nonprofit agricultural organization, offered exclusively to members and their families, and not provided through an insurance policy regulated as health insurance. The bill outlines essential health benefits, such as ambulatory patient services, hospitalization, emergency services, and mental health treatment, with a minimum coverage value of $2 million per year per enrollee. Additionally, it establishes a complaint system, mandates the designation of an ombudsman, and requires annual actuarial opinions to ensure plan reserve adequacy. Health benefits contracts will not be subject to post-claim medical underwriting, and only licensed insurance producers affiliated with the nonprofit organization may sell these benefits.

The bill also introduces a 1.3 percent annual tax on premiums collected by nonprofit agricultural organizations, which must be reported and paid biannually to the Department of Insurance. This tax is exclusive, preventing counties or municipalities from imposing additional taxes or licenses on these organizations, and they will be exempt from income taxes under Chapter 18 of Title 40 of the Code of Alabama 1975. The Department of Insurance will administer the collected taxes, with a portion allocated for administrative costs not exceeding two percent, while the remaining funds will be deposited into the State Treasury and credited to the State General Fund. The act is set to take effect on June 1, 2025, following its passage in the Senate on May 1, 2025.