Fore! A map of benefits traps, hazards in 2026 state legislation 

In the 1980 movie Caddyshack, Chevy Chase gives his golf protégé Danny this advice: “See your future, be your future…make your future.” Right now, legislators in 46 state houses are working to make their states’ future. The challenge for insurance and benefit professionals is to see what that future holds.

As 2026 tees off, early bill filings and other developments give us a clue about what to expect:

• Prescription drugs. Most states will continue to push Pharmacy Benefit Manager reforms, emphasizing reimbursement rates, spread pricing, enhanced transparency and reporting, and rebate pass-through. Fully insured plan caps on insulin cost sharing are increasingly popular; last year California became the 29th state to adopt these limits. Keep an eye on the courtrooms as well. Arkansas, Iowa, Minnesota and Tennessee are defending their PBM laws while several states – among them, Delaware, Missouri and Oregon – are suing drug manufacturers and PBMs over alleged insulin price manipulation.
• Vaccines. Vaccine policy under the Department of Health and Human Services is undergoing significant change; the latest example is a reduction in routine immunizations on the childhood vaccine schedule. States are responding in areas where they have control over insured plan coverage requirements, Medicaid services and other public health programs. Two major compacts — the West Coast Health Alliance and Northeast Public Health Collaborative — have formed to make vaccine recommendations. Some states now recognize HHS recommendations as of a certain date – Jan. 1, 2025 is common – and at least 20 states have announced they will abide by recommendations from the American Academy of Pediatricians. New Jersey just passed legislation; bills are pending in other states, including Michigan and Vermont. While states cannot directly regulate self-funded ERISA plans, these state actions may improve vaccine access and uptake.
• Paid leave. Virginia was the first state to adopt voluntary paid family leave insurance. It currently requires Paid Sick and Safe Leave for home health workers only. Now, the state looks poised to mandate both Paid Family and Medical Leave for private employers with at least one employee and PSSL for all employers, including city and state governments. Other potential PFML states include Hawaii (which has a longstanding temporary disability insurance mandate), Illinois (its accrued paid leave mandate took effect in 2024), New Mexico (its PSSL mandate took effect in 2022) and Pennsylvania.
• Insurance mandates. Fully insured coverage requirements under consideration include fertility services (e.g., Kentucky and West Virginia), GLP-1s to treat obesity (e.g., Mississippi and New Hampshire), prior authorization restrictions (e.g., Missouri and Wisconsin) and ground ambulance reimbursement rates (e.g., Wisconsin). Even though self-funded ERISA plans are beyond these laws’ reach, employers with significant populations in these states should keep track of legislation for recruiting and retention purposes.
• Artificial Intelligence. States are continuing to fill the federal AI void, despite President Trump’s Executive Order aimed at reducing state AI activity. In 2026, expect AI legislation in the areas of prior authorization, utilization review, claims denials and medical necessity determinations. Separately, a South Carolina bill would limit AI use in therapy and psychotherapy services, addressing a growing concern regarding AI in mental health treatment.
• Telehealth. States continue to expand the scope of telehealth through interstate compacts (e.g., Alaska and Rhode Island) for various specialties. PSYPACT is popular. More states are seeking telehealth reimbursement parity with in-person services for insured plans (e.g., Massachusetts and New Hampshire).
• Other matters. With the enhanced premium tax credit expiring, some states have taken steps to make up some of the difference, either through use of existing funds (e.g., those with state-run exchanges, like California, Colorado and Maryland) or new bills (e.g., Georgia, Mississippi and Nebraska).

For a broader discussion of these issues, see section 1, 5 and 10 of this GRIST: Top 10 health, fringe and leave benefit compliance and policy issues in 2026.

How can employers approach the 2026 legislative cycle? Consider using these three clubs in the golf bag: 

1. Driver. Employers can drive change. Leverage memberships in trade associations or affinity groups. Hearing testimony and comment letters are two straightforward ways to have an influence.
2. Wedge. Discuss concerns with insurers, PBMs and other vendors, who can act as an effective wedge against the progress of unfavorable legislation. In the past, bills have stopped short of the hole (or changed direction) because of behind-the-scenes work. 
3. Putter. Put your senior leadership team on notice as to these issues and their potential impact on the company’s workforce and budget.

The state legislative cycle will be abbreviated this year, due in part to fall midterm elections. Keep in mind that once a bill becomes law, there are no mulligans.