August 26, 2025
In response to the continuing state regulatory activity involving health plan and employer sponsored employee programs, we have attached a summary of these legislative updates.
Feel free to contact your Fedeli Group service team to address your regulatory compliance questions and concerns.
Arizona: Prescriptions
On August 6, 2025, an Executive Order was signed to lower the cost of prescription drugs. Arizona and ArrayRX are partnering to provide discounted prescription drug prices. Arizona residents may enroll in the program at no charge.
California: Health Insurance Coverage
On July 30, 2025, health care service plan contracts and health insurance policies are prohibited from requiring a re-diagnosis for certain conditions. Any policy that is issued, amended or renewed shall not require enrollees or insured individuals previously diagnosed with Pervasive Developmental Disorder (PDD) or autism to undergo a re-diagnosis to maintain coverage for Behavioral Health Treatment (BHT) for their condition. Current effective date: January 1, 2026.
California: Health Insurance Coverage
The Fertility Coverage Mandate was initially scheduled to be effective on July 1, 2025. The effective date has now been pushed back six months. The new effective date: January 1, 2026.
Connecticut Update: Mental Health Parity
On August 15, 2025, the Connecticut Insurance Department implemented a requirement for insurance companies to prepare detailed annual reports that verify their products provide equal access to mental health and addiction services when compared to other medical care and services. Additionally, carriers shall include data on prior authorization requirements, provider network standards, and claims review processes. Reporting Date: March 1, 2026.
Hawaii: Employer Filing
Effective January 1, 2026, the Hawaii’s electronic filing threshold for Forms W-2 and HW-2 is lowered to 10 or more forms filed in the calendar year. This limit applies regardless of the employer’s annual withholding tax liability. The prior limit was 250 or more.
Illinois: Mental Health
On August 1, 2025, the Wellness and Oversight for Psychological Resources Act was enacted. The Act requires that licensed mental health professionals, such as psychologists, social workers, counselors, may provide therapy or psychotherapy services to Illinois residents. Specifically, the Act is directed at “unregulated artificial intelligence systems” that offer therapeutic services without human oversight. Per the Act, licensed professionals are limited in the use of AI tools for administrative tasks, processing insurance claims, maintaining client records, and analyzing non-HIPAA protected data. Per the Act, AI tools are not permitted to make independent therapeutic decisions, directly communicating with patients or assessing emotions and mental states.
Illinois: Employee Breaks
On August 1, 2025, the Nursing Mothers in the Workplace Act was modified. The updated legislation requires employers to provide reasonable break time to employees who need to express breast milk for nursing each time the employees need to express milk. Employees shall receive this accommodation for one year after the child’s birth. The break time may run concurrently with any break time already provided to employees. Employers are required to compensate for the break time at the employee’s regular compensation rate. Employers are prohibited from requiring that the employee use paid leave or reduced compensation rate during the break time. Expected effective date – January 1, 2026.
Illinois: Health Care Provider Training
On August 1, 2025, health care providers are required to complete a one hour of training on historical racial differences in maternal care before renewing a state license. Health care professionals will take this course as part of implicit bias awareness training. This training course may be applied toward their continuing education requirements. Expected effective date: June 1, 2026.
Illinois: Health Insurance Coverage
On August 1, 2025, group and individual health insurance policies shall provide coverage for medically necessary anesthesia services regardless of duration. Per the legislation, insurance providers are prohibited from denying payment or reimbursement for anesthesia services solely based on whether the duration of care exceeded a preset time limit. Expected effective date: January 1, 2026.
Illinois: Health Insurance Coverage
On August 1, 2025, group and individual health insurance policies shall provide coverage for therapeutic horseback riding (Hippotherapy). Hippotherapy can improve neurological, cognitive, physical and communication deficits. Expected effective date: January 1, 2026.
Illinois: Retirement Savings
On August 1, 2025, the Illinois Secure Choice Savings Program was amended. Per the new rules, employers shall automatically enroll employees who have worked for at least 120 days into the Program. The program permits eligible employees to contribute 3% to 6% of their wages by default. Under the program, the contribution rate automatically increases annually up to 10% of wages. Additionally, employees may simultaneously maintain traditional and Roth IRA accounts within the program.
Illinois: Insurance Provider Payments
On August 1, 2025, insurance providers shall pay medical treatment invoices directly to the health care provider assigned by the patient. Additionally, the insurance providers shall pay the medical invoices within 30 days. Expected effective date: January 1, 2026.
The law applies to:
Illinois: Health Insurance Coverage
On August 1, 2025, group, individual health insurance policies, and managed care plans shall provide coverage for karyotype tests and related hormone testing used to diagnose the condition Klinefelter Syndrome. This condition occurs when boys are born with an extra X chromosome. Expected effective date: January 1, 2027.
Illinois: Military Leave
On August 1, 2025, worker leave protections shall now include time off for employees who participate in military funeral honor guard details. The legislation renamed the Military Leave Act to the Family Military Leave Act. The Act permits eligible employees at companies with 51 or more workers to take up to 8 hours of paid leave per month (40 hours annually) to participate in veteran funeral ceremonies.
Illinois: Health Insurance Coverage
On August 1, 2025, an expansion of mental health, pregnancy care, and insurance health plan transparency was authorized.
Mental Health Protections
Health insurers are prohibited from requiring prior authorization for outpatient or partial mental health hospitalization services. For inpatient treatment at in-network hospitals, the health insurers must wait 72 hours before requiring prior authorization and concurrent reviews. Hospitals shall notify insurers and submit an initial treatment plan within 48 hours. Health insurers shall not restrict FDA-approved substance use disorder medications that comply with guidelines from the American Society of Addiction Medicine. Health insurers shall not require Step Therapy. Additionally, the applicable medications must be on the lowest formulary tier.
Pregnancy and Postpartum Care
Health insurers shall cover treatments from perinatal doulas and licensed midwives. This shall include treatment for labor support, home births and miscarriage care. Health insurers shall provide coverage for medical equipment for home births. Doula treatments are restricted to 16 pre- and 16 post-birth, miscarriage or abortion. This treatment coverage is limited to $8,000 per-pregnancy limit. Health insurers shall provide coverage for Lactation Consultants, breast pumps and related supplies if recommended by certified specialists. Health insurers shall provide coverage to most pregnancy and postpartum services with no cost-sharing, except for home births and some behavioral health care.
Autism Coverage
The $36,000 annual cap for autism treatment shall be adjusted annually for inflation. Coverage shall continue regardless of changes in diagnostic criteria when the original diagnosis meets the prior standards.
Health Plan Standards
Insurers must meet access requirements for mental health care:
Each in-network hospital must include a preferred radiologist, pathologist, anesthesiologist and emergency physician.
Reporting Requirements
Insurers are required to file annual reports detailing medical loss ratios with breakdowns for clinical services, quality improvements, and administrative costs.
Illinois Update: Telehealth
On August 15, 2025, the Illinois Physical Therapy Act was modified to permit physical therapists the use of telehealth platforms to perform an initial evaluation under certain circumstances. The modified legislation removes language prohibiting initial physical therapy evaluations without a referral or established diagnosis are to be performed by a licensed physical therapist without the use of telehealth platforms with the exception of a documented hardship. Effective immediately.
Illinois Update: Health Insurance Coverage
On August 15, 2025, health insurers are required to cover procedures for peripheral artery disease screening. Current effective date: January 1, 2027.
Illinois Update: Retirement Plan
On August 1, 2025, the Illinois Secure Choice Savings Program instituted a requirement for covered employers to ensure the IRAs are portable. Additionally, employers shall automatically enroll employees who complete 120 days of employment.
Maine: Health Plan Coverage
Effective January 1, 2026, group health plans must provide coverage for nonprescription oral hormonal contraceptives and nonprescription emergency contraception. Previously, coverage was required only for prescription contraception.
Maine Update: Paid Leave Law
On September 24, 2025, the Earned Paid Leave Law was amended to include:
The previous policy for carryover was limited to 40 hours of accrued and carried over leave.
Minnesota Update: Paid Family and Medical Leave
On December 1, 2025, notice requirements for the Minnesota Paid Family and Medical Leave (PFML) shall begin:
On June 16, 2025, the Minnesota Department of Employment and Economic Development (DEED) published final rules for the PFML regulation.
Missouri Update: Retirement Plan
On September 1, 2025, Missouri employers with up to 50 employees may participate in the state-run Show-Me MyRetirement Plan.
The Show-Me MyRetirement Plan Board (Board) shall design the plan and regulations for plan operation. The Board may roll out employer eligibility in phases in order to maximize implementation for entities of various populations. Should the Board choose to use the roll out phase process, the strategy timeline must be significantly completed by September 1, 2025.
Nebraska: Workplace Poster
The State of Nebraska has made available its Paid Sick Time poster. The poster is available in English and Spanish.
Nebraska: Employee Notice
The State of Nebraska has made available its Paid Sick Time Notice of Employee Rights. The notice is available in English and Spanish.
Nebraska Update: Paid Sick Leave Notice
On September 15, 2025, the Nebraska Healthy Families and Workplaces Act covered employers shall distribute written notice to current employees or upon hire for new employees. Employers shall also display a workplace poster of the Act. The Act’s requirements will begin on October 1, 2025.
New Hampshire: Employee Leave
Effective January 1, 2026, New Hampshire employers with 50 or more employees at a single location are prohibited from terminating, refusing to hire or taking adverse employment actions against an employee due to the involuntary mobilization of their spouse during a declaration of war, national emergency, or contingency operation. Employees who take an unpaid leave of absence because of a spouse’s involuntary mobilization are entitled to reinstatement in their previous position or a comparable one.
New Hampshire Update: Employee Leave
On January 1, 2026, New Hampshire employers with 20 or more employees shall provide employees with up to 25 hours of unpaid leave to:
Per the regulations, employees:
Employers are permitted to require documentation from the employees to confirm that the leave is permissible.
New Mexico Update: Prescription Regulations
On August 14, 2025, the New Mexico Office of Superintendent of Insurance eliminated the requirement of prior authorization and step therapy requirements for FDA-approved drugs. Health insurers are required to finalize coverage decisions within seven business days for standard cases and 24 hours for emergencies. Medical necessity determinations are to be completed by healthcare professionals from the same or similar specialty that typically treats the condition at issue. Coverage shall be automatically approved if the insurer fails to comply with these deadlines.
New Mexico Update: Health Insurer Regulations
On August 14, 2025, the New Mexico Office of Superintendent of Insurance clarified an insurer’s obligation to provide prior authorization language in their evidence of coverage documents for Section 59A-22B-8 compliance. Additionally, guidance was issued for insurers discontinuing a qualified health plan. The insurer must:
New York: Paid Leave
Effective July 31, 2025, New York State’s COVID-19 Paid Sick Leave Law officially expired.
Oregon: Pharmacy Benefit Manager (PBM)
On July 29, 2025, Permanent Administrative Order ID 6-2025 was issued with an update to PBMs and drug price transparency regulations. Effective Date: August 1, 2025.
The key changes include:
PBM Registration
Drug Price Transparency (Rule 836-053-1630)
Enhanced PBM Reporting Requirements (Rule 836-200-0418) received amended reporting categories as per OR HB 4149:
Market Conduct Rules (Rule 836-200-0440)
Pennsylvania: Paid Sick Leave
The City of Philadelphia has released its updated Paid Sick Leave Poster. Click here to access the poster in English and Multiple Languages.
Pennsylvania Update: Prescription Drugs
On August 9, 2025, the Pennsylvania Insurance Department implemented a requirement for health insurers and pharmacy benefit managers to provide patient access to prescription medications following Rite Aid’s bankruptcy and store closures. Insurers shall notify state regulators if they cannot comply with the state’s time and distance standards for pharmacy access following the closures. Entities that are unable to adhere to the federal and state network requirements shall institute alternative options including the use of out-of-network pharmacies to be covered at in-network fees.
Employers shall also provide support systems such as hotlines or online portals to facilitate a patient’s need to transfer prescriptions. Existing authorizations and drug exceptions implemented at a closed Rite Aid store shall be transferred to the patients’ new pharmacy without the need to obtain new authorizations or approvals.
Puerto Rico Update: Lactation Accommodation Requirements
On August 1, 2025, the Puerto Rico Lactation Code was enacted. The Code requires employers to provide dedicated lactation rooms that are hygienic, private, safe, equipped with electrical power, ventilation, water access and a refrigerator exclusively for breast milk storage. The designation of restrooms for nursing purposes is prohibited.
Rhode Island: Paid Family Leave
Effective January 1, 2026, Rhode Island amends its Paid Family Leave (Temporary Caregiver Insurance) law to cover:
The Rhode Island Department of Labor and Training confirmed that the bill contains an error indicating that certain amendments are retroactive to January 1, 2025. Effective date for the amendments: January 1, 2026.
Washington Update: Health Care Contract Disputes
On August 8, 2025, the Washington Office of Insurance Commissioner authorized new restrictions for public statements made by health insurers and medical providers involving potential contract terminations. Health carriers, hospitals, and medical providers shall not issue public announcements about potential contract terminations until 45 days before the actual termination date. The public announcements include press releases, newspaper editorials, direct communication with patients, and other public statements.
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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