Alfa, one of Alabama’s largest property-casualty insurers, makes clear it has no plans to move into the health insurance business: A hotly debated bill in the state Legislature would allow the Alfa-affiliated Farmers Federation to offer a health plan to some members , and some news out of Alabama this week suggests that Alfa Insurance is behind the move.
“Alfa Insurance is a property and life insurance company. It’s not going to go into health insurance coverage,” said Jeff Helms, director of communications for the Alfa Farmers organization.
Senate Bill 232 does not name Alfa, which began as the Alabama Farmers’ Federation in 1921 and established its insurance arm in the 1940s. But the bill would allow “agricultural nonprofits” to provide health benefits to members and their families. Alfa officials said they hope to reach small business owners and others who don’t qualify for a health plan under the Affordable Care Act, known as ObamaCare, but who say they can’t afford marketplace-based health insurance .
Two Alabama news outlets indicated that Alfa Insurance, best known for its 1 million home and auto policies in the South, is now setting its sights on the health insurance market. Helms said that’s not the case.
However, Blue Cross Blue Shield of Alabama, which now writes the health coverage for Alfa members, opposed the plan. A video of this week’s Alabama Senate Banking and Insurance Committee meeting was not available, but news outlets quoted Blue Cross Blue Shield of Alabama’s director of government affairs as saying the bill is an end to strict health insurance regulations.
The bill is not pro-business, only pro-Alpha, lobbyist Ted Hosp told the committee.
A Democrat on the committee, Sen. Bobby Singleton of Greensboro, said that if Alfa wants to help with health insurance for working people, it should support Medicaid expansion, the Daily News reported. Medicaid expansion was opposed by many Republican leaders in Alabama and several other southern states.
The American Cancer Society also questioned the bill, noting that it would allow Alpha’s member federation to choose the people it wants to cover and would not guarantee coverage for cancer treatment, as health insurers must.
Under current Alabama law, organizations like the Alpha Federation are not allowed to offer health benefits to members, the bill explains. The proposed change would allow plans similar to those in Tennessee and five other states, the Daily News noted.
The bill is sponsored by Senator Arthur Orr, a business owner and chairman of the Senate Education Committee on Finance and Taxation.
If approved and signed into law, the measure could have a significant impact on state premium collections, according to a legislative staff fiscal analysis. This “could reduce insurance premium tax revenue to the State General Fund by an undetermined amount if members of agricultural nonprofits cancel existing insurance plans in lieu of health benefit options provided by agricultural nonprofits,” the fiscal statement said. note.
That revenue loss could reach more than $19 million a year if just 15 percent of Alfa members sign up, the Alabama Political Reporter notes.
The bill specifies that the agricultural nonprofit “shall not engage in health insurance,” but will be able to offer “benefits.”
“A nonprofit agricultural organization that offers nonprofit agricultural health benefits must provide an individual applying for nonprofit agricultural health benefits with written notice that the benefits are not provided through an insurance policy or other product , the offering or issuance of which is regulated as the business of insurance in this state,” the bill says.
The bill may have a good chance of passing this year. Alfa is known for its influence in the Alabama Capitol and other insurers, and some insurance agents have repeatedly complained that Alfa is given preferential treatment with significant tax breaks that other carriers do not enjoy.
Alfa Farmers has more than 300,000 members.
Photo: Alabama State Capitol Building.
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