June 6, 2025
With this bulletin we are providing updates designed to provide informative snapshot description alerts for topics at a state level, including:
Not all the newly enacted regulations will result in the employer receiving a new direct obligation to address. Often, it is the health insurance carrier who is tasked with introducing a new requirement into the insurance product / health plan design. The employer is left with a limited obligation of verifying that its employee benefit plan insurance partner has created and following through on an appropriate action plan to introduce the new requirement.
Feel free to contact your Fedeli Group service team to address your regulatory compliance questions and concerns.
Arizona Insurance Claims
On May 12, 2025, Gov. Katie Hobbs signed AZ H.B. 2175 modifying the steps that health insurers must follow to deny claims based on medical necessity reasons. Under the newly signed legislation, health insurers seeking to deny a provider-submitted claim on medical necessity grounds must have their medical director conduct an individual claim review. The same requirement applies to direct denials of prior authorization requests based on medical necessity. The law directs medical directors to “exercise independent medical judgment” during these reviews and prohibits the medical directors from relying solely on recommendations from other sources such as artificial intelligence systems or external review organizations. Expected effective date is June 30, 2026.
California Expands Infertility Health Plan Coverage Requirement
Employers who introduce or renew a group health plan on or after July 1, 2025, are required to expanded infertility coverage to include in vitro fertilization treatment. Specifically, group health plans shall now cover the diagnosis and treatment of infertility by providing for a maximum of three completed oocyte retrievals and unlimited embryo transfers.
Colorado Preventive Health Coverage
On May 12, 2025, Gov. Jared Polis signed CO S.B. 196 authorizing state regulators to maintain current prevention coverage requirements if federal guidelines are “repealed, modified, or otherwise no longer in effect.” The measure specifically targets coverage for services currently rated A or B by the U.S. Preventive Services Task Force, including cancer screenings, immunizations, and wellness visits.
Florida Reduces Timeframe To Request Health Coverage Overpayments
On May 20, 2025, Gov. DeSantis signed legislation reducing the period for insurers to request overpayments paid to psychologists and other medical providers to twelve months. The previous statute authorized insurers to request the overpayments within a thirty-month window.
Maryland Insurance Regulations
On May 13, 2025, Gov. Wes Moore signed MD H.B. 1045 requiring insurance carriers to maintain standards for grandfathered health plans based on federal rules in effect at the end of 2024. Similar updates apply to essential health benefits coverage, ensuring insurers continue providing comprehensive services even if federal requirements change. Expected effective date – June 1, 2025. Key insurance provisions in the legislation include:
Maryland Telehealth
On May 13, 2025, Gov. Wes Moore signed MD S.B. 372 making permanent the provisions of law that specify that:
These provisions apply to both Medicaid and commercial health insurance. The bill authorizes a health care practitioner to prescribe a Schedule II opiate for the treatment of pain through telehealth under specified circumstances.
Maryland Prescriptions
On May 15, 2025, the Maryland Insurance Administration issued Bulletin 25-7 requesting health insurance carriers waive time restrictions on prescription refills and medical equipment replacement following severe flooding in western Maryland. Insurers are asked to “voluntarily waive” normal time restrictions on:
Affected Counties: Allegany, Garrett
Maryland Out-Of-Network Utilization Expansion
On May 20, 2025, Gov. Wes Moore signed MD S.B. 902 to require health insurers to permit out-of-network specialist referrals when attempts to schedule timely appointments within reasonable travel distances with in-network mental health providers cannot be accommodated. Additionally, the new legislation prevents insurance carriers from requiring additional utilization reviews for these newly approved referrals and insurance carriers are required to offer “additional assistance” to health plan participants experiencing difficulties in accessing needed mental health care services through the standard referral process.
Maryland Anesthesia Coverage
New legislation prohibits health insurance carriers and Medicaid from enforcing time limitations on anesthesia coverage during medical procedures. Insurance carriers are required to cover the full duration of anesthesia use for procedures ordered by a licensed provider. This coverage will also include the use of anesthesia for associated medical care immediately before and after the ordered procedure.
Maryland Medical Claim Denial Transparency
Insurance carriers must provide transparent communication to plan participants when explaining claim reviews resulting in an “adverse decision” or an appeal denial. In addition, denial notices shall now require:
The new regulation also enhances the reporting of adverse decisions and denials that claim data identifies as increased trends. When claim data establishes that either a one year 10% increase or a three-year 25% increase in the application of adverse decisions to claims of a specific service has occurred, the insurance carrier is mandated to report the following:
Maryland Calcium Testing Requirement
Health insurance carriers are required to cover preventative claim services for calcium score testing as per the current guidelines provided by the American College of Cardiology.
Maryland Insulin Treatment
Health insurance carriers cannot require the use of a step therapy or fail-first protocol for insulin or an insulin analog that has U.S. Food and Drug Administration (FDA) approval and is used to treat Type 1, Type 2, or gestational diabetes.
Maryland Advanced Metastatic Cancer Treatment
Health insurance carriers cannot require the use of a step therapy or fail-first protocol for a prescription drug with U.S. Food and Drug Administration (FDA) approval that is prescribed by a treating physician to treat a symptom or side effect of stage four advanced metastatic cancer.
Maryland Specialty Drug Coverage
Health insurance carriers, nonprofit health service plans, and health maintenance organizations including those that provide prescription drug coverage through a pharmacy benefits manager (PBM), shall not exclude coverage of a covered specialty drug administered or dispensed by an in-network provider of covered oncology services, complies with State regulations for the administering and dispensing of specialty drugs which include auto-injected or oral targeted immune modulators, or specific oral medications. For specialty drugs meeting the legislation’s exclusion protection, the reimbursement rate must be agreed to by the carrier, the covered, and the in-network provider. Further, the applicable specialty drug must be billed at a nonhospital level of care or place of service. The legislation does permit a carrier to deny authorizing, approving, or denying coverage of a covered specialty drug administered or dispensed by an authorized provider when administering or dispensing the drug does not comply with medical necessity criteria.
Maryland Childhood and Adolescent Immunizations
Child Wellness Services Packages offered by health insurance carriers must provide coverage for all childhood and adolescent immunizations recommended by the CDC Advisory Committee on Immunization Practices. Insurance policies shall not implement deductibles on these services.
Maryland Adult Hearing Aid Coverage
Health insurance providers are required to provide coverage for hearing aids for adults when the hearing aids are ordered, fitted, and dispensed by a licensed hearing aid dispenser.
Maryland Small Employer Cancellation and Nonrenewal Notice Requirements
Health insurance carriers must provide a minimum 90-day notice of the cancellation or nonrenewal of a small group health benefit plan. The notice is to be sent to the affected small employer, the enrolled employees, and the Insurance Commissioner. In addition, the carrier must offer (within 7 days) each affected small employer the option to purchase all additional health benefit plans that the carrier offers in the small group market.
Maryland Preventative Care Coverage And Exemption
Health insurance carriers are required to provide preventive services at no cost and provide clarification as to when high-deductible health plans may apply deductibles to certain preventive services. Preventive services include the following:
This regulation does not remove or alter the existing religious exemption that permits certain organizations to exclude contraceptive coverage when it conflicts with their bona fide religious beliefs.
Maryland Artificial Intelligence Application Limitations
Health insurance carriers, pharmacy benefits managers (PBM) and private review agents (PRA) that use “artificial intelligence” (AI), algorithms or other software tools to conduct utilization review (including working through an entity that uses such tools) are required to limit the usage of these tools to the legislatively approved manner. Under the legislation, claim determinations derived through AI systems are to be based on the patient’s individual clinical circumstances and not solely from group datasets. Further, the legislation expressly denies the use of AI tools as a replacement for relying on healthcare provider input in completing utilization reviews, in determining whether to deny, delay or modify health services.
In addition, any of the above listed entities who utilize AI systems in the manner(s) described here are required to complete quarterly reviews of their AI systems. This review requirement is implemented to ensure accuracy and reliability. Health insurance carriers are also required to document the incidents when artificial intelligence played a role in issuing an adverse claim decision. This data will be included in their respective quarterly reports.
Massachusetts Health Insurance Affordability Requirements
On May 12, 2025, the Massachusetts Division of Insurance released Filing Guidance Noticed 2025-J directing health insurers to demonstrate how their proposed rates address “affordability for consumers and purchasers of health insurance products” when submitting filings. The requirements were established by Chapter 343 of the Acts of 2024, which revised state insurance regulations to incorporate affordability factors when assessing the excessiveness of rate increases.
Under the guidance, insurers must ensure that average member cost sharing, including deductibles, does not increase year-over-year by more than the New England Consumer Price Index for health care for November 2024. Exceptions are permitted only when necessary to meet federal Actuarial Value calculator requirements.
Health carriers are required to submit detailed explanations of how their filings address affordability concerns in both their Evidence of Coverage documents and Actuarial Memoranda.
North Dakota Income Tax Credit
On May 1, 2025, Gov. Kelly Armstrong signed ND S.B. 2282 establishing a new income tax credit for employers who provide childcare contributions to their employees. The legislation creates a 50% tax credit for qualified employers who subsidize their employees’ childcare costs. Employers can claim the credit for up to $1,000 in childcare contributions per qualified employee during the taxable year.
To qualify for the credit, employers must meet two requirements:
Oklahoma Qualified Health Plan Pilot Directory Program
The Oklahoma Insurance Department (OID) is partnering with the Centers for Medicare and Medicaid Services (CMS) to launch a pilot provider directory program for those participating in a Qualified Health Plan (QHP). Employer sponsored health plans do meet the requirements of a QHP. The pilot will establish and implement an automated, one-stop shop, statewide centralized directory that allows QHPs and providers to submit and access pre-populated provider data to improve accuracy and reduce burden. Per the bulletin, the OID is requiring all QHP issuers to participate in the pilot program. The pilot program is separate and distinct from the provider directory requirements set forth in Section 6971 of Title 36 of Oklahoma Statutes and discussed in OID Bulletin No. 13-2023. Participation in this pilot program does not replace or modify any responsibilities.
Oregon Paid Family and Medical Leave
On May 8, 2025, Gov. Tina Kotek signed OR H.B. 3021 expanding the authority of the Oregon Employment Department to administer the state’s paid family and medical leave insurance program alongside its traditional unemployment insurance duties by adding oversight responsibilities. In addition, the legislation replaces terms like “men and women” with “people” and updating references from “aliens” to “noncitizens.” It also removes outdated childcare provisions that were previously part of the department’s responsibilities. The provisions take effect 91 days after the legislative session ends, though expanded rulemaking authority won’t become operative until January 2026.
Oregon Provider Payments During Credentialing Period
Health insurance carriers must pay medical service claims submitted by healthcare professionals during their respective credentialing period. The health insurance carriers have 90 days to complete the credentialing decision. While the health insurance carrier is conducting its review, the claims submitted by the healthcare professional under review must be paid under the standard in-network rate. Additionally, healthcare professionals who are joining an existing medical group must have their submitted claims paid at the same in-network rates as other group members during the credentialing period. Should the credentialling review result in a rejection or if the application is denied for being incomplete, the medical group must reimburse the health insurance carrier for the difference between in-network and out-of-network payment rates.
Oregon Health Insurance Rates
Oregon has redesigned the state’s insurance rate review system. Specifically, the “preliminary decision” step which previously preceded the final regulatory action has been removed from the process. Under the new process, the Department of Consumer and Business Services shall proceed directly from public comment periods towards issuing the final orders on rate filings. This design change will affect the rate reviews for small employer health insurance plans.
Texas Waiting Period For Medical Test Results
Texas is implementing a required three-day waiting period before cancer screenings and genetic tests can be shared electronically with patients. The legislation requires the waiting period for documentation that may reveal “sensitive test results”. As per the new legislation, this will include pathology and radiology reports, as they may detail cancer findings along with any test results that could reveal genetic markers. Under the new rules, these results cannot be disclosed to patients or their representatives through patient portals, health apps or other electronic means until at least three days after the results are finalized. The expected effective date for this new rule is September 1, 2025.
Vermont Paid Family Medical Leave
Vermont’s new regulations expand employee access to unpaid family medical leave so that equal access can be provided to LGBTQ+ families, low-income workers, and nontraditional family structures. The following new types of protected unpaid leave which allow up to 12 weeks within a 12-month period include:
Washington Paid Family and Medical Leave
The State of Washington extends employment protections to workers of small businesses for the following areas:
Washington Worker Leave and Safety Protection Expansions
Workplace leave and safety protections are extended to assist employees victimized by hate crimes. Workers will be permitted to obtain a reasonable leave period from work to seek legal assistance, obtain medical treatment, access social services, receive mental health counseling or participate in safety planning.
Washington Pregnancy Accommodations
Employees who are pregnant or nursing mothers received clarity in addressing additional workplace accommodations that address their specific needs. These enhancements include:
Washington Healthy Starts Act
Please note that as of January 1, 2027, the Healthy Starts Act will repeal the state’s existing pregnancy accommodation laws and will implement by expanding requirement for worker pregnancy and lactation accommodations. Replacing the prior requirements will be the following:
Washington Health Insurance Cancellation And Network Disruption
Under the new regulation, health plans, hospitals, and medical practices are prohibited from notifying patients about potential contract terminations until 45 days before the actual termination date. The regulation does recognize that earlier disclosures may be authorized when specific legal obligations apply. The mandated “quiet period” prohibits insurers and health care facilities from making public statements or initiating direct communications with patients regarding potential network disruptions.
DISCLAIMER
The information provided by The Fedeli Group’s Compliance Alert is not intended to be, nor should it be, interpreted as conferring legal advice to the reader of the Compliance Alert. The Fedeli Group Compliance Alerts are designed specifically and solely for informational purposes. Should the reader have any legal questions or concerns after reading this Compliance Alert, it is recommended that the reader seek counsel for a formal opinion.
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