(a) Any instrumentality or agency of the State of Alabama, whose principal activity consists of distributing goods or services by contract with the United States, or any federal governmental corporation, and which are not covered by the provisions of Chapter 29 of this title, shall be subject to all the provisions of this section. Such instrumentality or agency is hereby empowered to purchase and pay for group health, accident or hospitalization insurance coverage for its officers and employees. Such instrumentality or agency is hereby further authorized to contract with the State Employees' Insurance Board for group health, accident or hospitalization insurance coverage, and under such terms, conditions, and costs as the State Employees' Insurance Board and the instrumentality or agency shall mutually determine. The cost or premium for such group health, accident or hospitalization insurance shall not be deemed to be compensation to the covered party.
(b) All contracts and policies of group life, health, accident and hospitalization insurance which have been issued prior to July 1, 1991, to any instrumentality or agency defined in subsection (a) for the benefit of its officers and employees are hereby ratified, confirmed, approved and validated. All acts done and all premiums paid by said instrumentality or agency of any such contract or policy are hereby ratified, confirmed, approved and validated.
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