California-Illinois legislative sessions may forecast 2025 activity  

When Nobel Prize laureate Bob Dylan penned the lyric, “You don't need a weatherman to know which way the wind blows,” he did not have in mind the California and Illinois statehouses as the points of origin. But these two states’ 2024 legislative output may be a good bellwether for other states in 2025. 

Here are six trends to watch for when the calendar flips: 

1. Infertility coverage. Both states passed laws expanding infertility mandated for fully insured coverage. California’s law primarily focused on large group market plans, requiring coverage of  In Vitro Fertilization, including up to three completed oocyte retrievals and unlimited embryo transfers. The small employer exclusion from Illinois’ coverage mandate expires at the end of 2025 and plans will have to include preimplantation screening and diagnosis in their IVF coverage. Look for more states to expand coverage of fertility services, including IVF and inclusion of same-sex couples and unmarried individuals, to their insurance codes. The debate should prove lively, with concerns over plan costs.
2. Artificial Intelligence. California, a technology hot bed, endured a hailstorm of AI bills in September. Some passed. Others were vetoed. One law required insured plans using AI to comply with specific standards for utilization review and management, banning use for medical necessity determinations. An Illinois law focused on “algorithmic automated processes” in medical necessity utilization review, requiring any initial adverse benefit determination to be made by a clinical peer (i.e., a healthcare professional). Some state insurance departments have issued preliminary bulletins addressing AI, but expect legislators to pick up the pace in 2025, especially for insurance activities where discrimination is a concern. 
3. Paid leave. California is a longtime player in the Paid Family and Medical Leave and Paid Sick and Safe Leave space. In recent years, the state has made updates to keep up with newcomers. This year was no exception, as laws extending PSSL rights to domestic violence victims and agricultural employees were enacted. Nationally, no new jurisdictions made it to the PFML or PSSL finish line this year, but we anticipate seeing plenty of states at the starting line in 2025, including those who have already run the PFML/PSSL race. For additional background, see our GRIST: 2024 state paid family and medical leave contributions and benefits. 
4. Pharmacy benefit managers. After SB 966 passed both California legislative chambers with a single dissenting vote, Governor Gavin Newsom’s veto was a shock. The comprehensive PBM bill would have applied to both fully insured and self-funded ERISA plans. His veto message said “the public and the Legislature need a clearer understanding of how much PBM practices are driving up prescription drug costs.” Perhaps, other states will adopt a more deliberative approach espoused by the governor, given the complexity of the prescription drug ecosystem. Without doubt, we will see no shortage of bills tackling drug costs in 2025. 
5. Healthcare reform for insured plans. Illinois Governor JD Pritzker’s signature health insurance reform law (the Health Care Protection Act) primarily targeted prescription drug step therapy protocols and prior authorization requirements for inpatient mental health services. Look for increased attention to these issues across statehouses in 2025, particularly when a practice arguably harms at-risk or disadvantaged segments of the population. 
6. Short-term, limited-duration insurance. These plans have come under fire in recent years. Earlier this year, the Biden administration issued final regulations limiting the duration of STLDI policies out of concern that they are essentially “junk insurance” sold to unwitting consumers (see this GRIST: Group fixed-indemnity plans pose legal, tax issues). Shortly after the federal rules were released, the Illinois legislature passed a law banning these plans, effective in 2025. Don’t be surprised to see other states follow suit in 2025, particularly where (like in Illinois) a state-based exchange is present. 

One thing is for sure: the 2025 state dance card will be full. Or, as Mr. Dylan once put it, “Come Senators, Congressmen, please heed the call … for the times they are a-changin'.”