Alabama Senate Passes Prescription Fee Bill Amid Employer Cost Concerns
A recently passed bill in the Alabama Senate, SB252, has sparked concerns among employers who warn it could lead to increased insurance costs for Alabamians. The bill, sponsored by Sen. Billy Beasley, was filed on Tuesday and swiftly passed the Senate on Thursday.
The core provision of SB252 mandates that pharmacy benefit managers (PBMs) and health plans reimburse independent pharmacies at a minimum reimbursement rate set by the Alabama Medicaid Agency, which includes a mandatory $10.64 dispensing fee per prescription.
Helena Duncan, president and CEO of the Business Council of Alabama, expressed concern that the bill would shift the financial burden from pharmacies to Alabama employers. Employers would then face the choice of absorbing the additional insurance costs or passing them on to their employees or customers.
Furthermore, the bill introduces a new cause of action for individuals, pharmacies, and pharmacists to file legal complaints against PBMs and their affiliates, potentially including self-funded health plans. Successful plaintiffs could recover actual damages plus a fine of $1,000 per violation or triple actual damages, whichever is greater. These provisions, along with the mandated fee, are set to expire on Oct. 1, 2027.
The reimbursement fee requirement is scheduled to take effect on Oct. 1. However, other provisions and mandated rule changes are set to begin immediately upon the governor’s signature, if the bill is enacted into law. PBMs and businesses argue that the immediate implementation of certain sections would create compliance challenges due to the complex operational structure of insurance and PBMs.
The bill now proceeds to the Alabama House of Representatives for further consideration.
Tax Cut Bills Sail Through House
The Alabama House of Representatives has swiftly advanced a series of bills aimed at providing broad tax relief to state residents, even as discussions continue regarding the existing overtime income tax exemption.
Representative Anthony Daniels introduced HB467, which seeks to eliminate the sunset provision on the overtime income tax exemption. Without legislative action, this exemption is set to expire later this year, potentially generating hundreds of millions of dollars in additional state revenue.
Meanwhile, House Education Budget Chair Danny Garrett successfully steered four key tax cut bills through the House this week:
- HB386: Grocery Sales Tax Reduction: This bill reduces the state’s portion of the sales tax on groceries from 3% to 2%, effective Sept. 1. It also removes the current requirement for budget triggers to further reduce the sales tax. The estimated annual cost of this reduction is $122 million. The bill passed with a 103-0 vote.
- HB387: Local Grocery Sales Tax Flexibility: This bill empowers local governments to remove their own local sales taxes on groceries. It eliminates the current restriction that prevents local governments from doing so when the state sales tax is lowered. This bill does not impact state revenue, but rather affects local governments that choose to act.
- HB388: Increased Senior Income Tax Exemption: This bill doubles the existing income tax exemption for Alabamians aged 65 or older with 401(k) or similar retirement plans, raising it from $6,000 to $12,000. The estimated annual cost of this bill is $45 million.
- HB389: Enhanced Standard Deduction: This bill increases the existing optional standard deduction from $2,500 to $3,000 and expands the income range eligible for higher standard deductions. It also adjusts the minimum and maximum standard deductions based on filing status. The estimated annual cost of this bill, once fully implemented by fiscal year 2027, is $25.1 million.
All four bills received unanimous approval in the House and now move to the Senate for further consideration.
Alabama House Approves Pro-Family Tax Cut
Rep. Neil Rafferty’s HB152, a bill aimed at providing tax relief for families, has unanimously passed the Alabama House of Representatives. The legislation proposes to exempt baby formula, maternity clothing, and menstrual hygiene products from the state’s 4% sales tax.
The estimated annual financial impact of this exemption on the state’s Education Trust Fund is approximately $13 million.
The bill now moves to the Senate for further consideration.
Paid Parental Leave Bill for Alabama State Employees Heads to Governor’s Desk
Sen. Vivian Figures’ SB199, a key priority for Gov. Kay Ivey, has passed the Alabama House of Representatives on Thursday. The bill now goes to the Gov. Ivey’s desk for her signature.
The legislation establishes a paid parental leave policy for state employees. Under the bill, female state employees are entitled to eight weeks of paid leave in the event of a birth, miscarriage, stillbirth, or adoption of a child, situations where they would otherwise use unpaid leave. Male state employees are eligible for up to two weeks of paid leave for the same circumstances.
The estimated cost to the state is projected to be between $8,100 and $10,750 per female employee utilizing the full eight weeks of leave, and between $2,000 and $2,600 per male employee taking two weeks of leave.
Bill Allocates Over $41 Million in Opioid Settlement Funds
House General Fund Budget Chairman Rex Reynolds has introduced HB460, a bill that outlines the distribution of over $41 million in supplemental funding stemming from Alabama’s share of nationwide opioid lawsuit settlements. Key allocations within the bill include:
- $27.86 million to the Department of Mental Health: This funding will support residential detox programs, the procurement of fast-acting overdose reversal medications, and the establishment of a dedicated opioid treatment center.
- $1.5 million to the Department of Veterans Affairs: These funds will be used to create a Veterans Pilot Program specifically designed to assist veterans struggling with opioid addiction.
- $2.6 million to the Office of Prosecution Services: This allocation will fund opioid prevention programs.
Alabama Bill Seeks to Strengthen Squatter Removal Law
Rep. Craig Lipscomb has introduced HB474, with nearly 60 co-sponsors, proposing amendments to the state’s existing squatter removal legislation. This bill aims to expand and refine the law passed last year, which simplified the process of removing unlawful occupants from private property.
Key changes included in HB474 are:
- Power of Attorney: The bill grants individuals with power of attorney the authority to act on behalf of property owners in squatter removal cases. This provision is designed to address situations where the property owner is unable to act directly.
- Jurisdictional Clarification: The bill clarifies that municipal law enforcement agencies, where applicable, hold sole jurisdiction in enforcing the provisions of the law, unless otherwise agreed upon with the local sheriff’s office. This aims to streamline enforcement and avoid jurisdictional conflicts.
Alabama Legislature to Reconvene April 1st After Spring Break
Alabama lawmakers will return to Montgomery on April 1 and resume the 2025 Regular Session with 14 legislative days remaining. The Legislature will be in recess next week, coinciding with the spring break observed by most Alabama schools.
Our governmental relations team is tracking the following bills:
| Bill | Sponsors | Title | Last Action | Latest Version |
| AL 2025rs HB 297 |
Fidler | International wire transfers; fee imposed on transfers; fee proceeds distributed to counties for specified purposes; income tax credit for paid wire transfer fees authorized (Financial Services (House)) | House, Mar 20, 2025: Re-referred to Committee in House of Origin (Financial Services) | Introduced |
| AL 2025rs SB 130 |
Melson | Financial Institutions and Businesses; authorizes gold and silver bullion and coins as legal tender
House Calendar: Regular Calendar (April 01, 2025) Position: 62 |
House, Mar 19, 2025: Read for the Second Time and placed on the Calendar (Financial Services) | Introduced |
| AL 2025rs HB 396 |
Paschal | Taxation and Revenue; Homestead ad valorum taxes of certain veterans prohibited from inclusion in debt-to-income ratio
House Calendar: Regular Calendar (April 01, 2025) Position: 74 |
House, Mar 19, 2025: Read for the Second Time and placed on the Calendar (Ways and Means General Fund) | Introduced |
| AL 2025rs HB 418 |
Kiel | Financial Institutions and Insurers; using social credit score to discriminate prohibited; violations of insurers an unfair trade practice; fines, penalties and remedies authorized (Financial Services (House))
Companion Bills: SB 228 |
House, Mar 6, 2025: Pending Committee Action in House of Origin (Financial Services) | Introduced |
| AL 2025rs SB 228 |
Jones (A) | Financial Institutions and Insurers; using social credit score to discriminate prohibited; violations of insurers an unfair trade practice; fines, penalties and remedies authorized (Banking and Insurance (Senate))
Companion Bills: HB 418 |
Senate, Mar 5, 2025: Pending Committee Action in House of Origin (Banking and Insurance) | Introduced |
| AL 2025rs SB 77 |
Weaver | International wire transfers; fee on wire transfers imposed; income tax credit for wire transfer fees paid, authorized; Securities Commission and Revenue Department to administer
Senate Calendar: Regular Calendar (March 20, 2025) Position: 2 |
Senate, Feb 13, 2025: Carried Over to the Call of the Chair | Introduced |
| AL 2025rs SB 141 |
Butler (T) | Financial Institutions; prohibit fee for periodic paper billing statements (State Governmental Affairs (Senate)) | Senate, Feb 11, 2025: Pending Committee Action in House of Origin (State Governmental Affairs) | Introduced |
| AL 2025rs SB 29 |
Elliott | Government issued licenses, permits, and certifications; time frame imposed for issuing licenses etc.; exceptions provided
Senate Calendar: Regular Calendar (March 20, 2025) Position: 4 |
Senate, Feb 11, 2025: Read for the Second Time and placed on the Calendar (County and Municipal Government) | Introduced |
| AL 2025rs HB 192 |
Shirey | International wire transfers; fee on wire transfers imposed with proceeds for ELL instructors; income tax credit for wire transfer fees paid, authorized; Securities Commission and Revenue Department to administer (Ways and Means Education (House)) | House, Feb 5, 2025: Pending Committee Action in House of Origin (Ways and Means Education) | Introduced |
| AL 2025rs SB 17 |
Coleman (M) | Digital assets, prohibits the state from certain actions related to digital assets and exempts certain actions from classification as a security or money transfer (Banking and Insurance (Senate)) | Senate, Feb 4, 2025: Pending Committee Action in House of Origin (Banking and Insurance) | Introduced |
