‘Usual suspects’ expected in 2025 state benefits legislation 

In the climactic scene of the movie Casablanca, two of the protagonists — Rick Blaine and Capt. Louis Renault — awkwardly stare at each other after Louis witnesses Rick murder a Nazi officer. Louis then announces: “Round up the usual suspects.” For this year’s state legislative cycle, expect to see the “usual suspects,” namely paid leave, prescription drug reform, telehealth expansion and insurance coverage mandates. Also look for at least one guest to join the year-long drama. 

Every state legislature is in session this year. Bill filing will continue through most of the first quarter. Ultimately, most bills die in committee, plus more on the chamber floor and a few on the governor’s desk.  

Successful monitoring requires attention and effort. Benefits professionals should pay attention to these areas as time goes by in 2025: 

1. Paid leave. In December, a bipartisan House task force published draft bills for a national Paid Family and Medical Leave solution consisting of an interstate network and a public grant program. The aim is to incentivize consistency and cooperation among state programs, but enactment may prove as elusive as the waters in Casablanca. As a result, several states have proposed PFML bills, including Alaska, Indiana, Nebraska, New Mexico and Oklahoma. Several existing PFML states may expand their programs, including New Jersey, New York and Washington. Paid Sick and Safe Leave is also on the agenda in states like Montana and Texas. The fate of Missouri’s PSSL law, approved by voters in November, is uncertain due to litigation and bills seeking repeal. Paid pet care leave is under consideration in New York state and New York City. 
2. Rx reform. ERISA preemption continues to be a hot issue for Pharmacy Benefit Managers, as some states aim to include self-funded ERISA plans. With the 10th Circuit Mulready case pending at the US Supreme Court and PBM reform stalling late last year in Congress, early signs are that the states will “play it again, Sam” (a line never spoken in the movie). Despite a governor’s veto last fall, California already has significant PBM bills on the docket. Connecticut, Kentucky, Indiana, Maryland, Missouri, New Jersey, Texas and Virginia also appear poised to be major PBM battleground states. In the fully insured space, more states are considering third-party financial assistance applying to cost sharing (like Nebraska and South Carolina) and insulin cost-sharing caps (like California and North Dakota). 
3. Artificial Intelligence. Like Ingrid Bergman’s portrayal of Ilsa, AI could steal the show as a relative newcomer. AI is becoming more prevalent in the insurance industry. In the past year, several state departments of insurance have issued initial bulletins. This year, state legislatures will deliberate comprehensive AI bills (like in New York, Texas and Virginia) as well as those focused on insurance (like New Jersey).  
4. Telehealth. States will continue to seek “a beautiful friendship” with other states via interstate compacts to improve healthcare access (like New Mexico and Pennsylvania). About 40 states are members of the Psychology Interjurisdictional Compact (known as PSYPACT); Hawaii, Massachusetts and Montana have current bills to join the group. Other states will address the issue of telehealth providers prescribing drugs (like New Jersey, New York and Texas).  
5. Insurance coverage mandates. Every year, states add benefits that fully insured plans must cover. Fertility treatment is still high on the list for some states (like Oregon and Washington), among others. The federal No Surprises Act omits ground ambulance services from its balance billing rules; New Hampshire and Oregon have pending bills. These laws generally do not apply to self-funded ERISA plans. 
6. Other bills of note. Ten states have not adopted the Medicaid expansion option in the Affordable Care Act, despite an enhanced federal matching rate. Pending bills in Mississippi, South Carolina and Texas could reduce that number. New York is considering a Long-Term Care insurance mandate for residents similar to the one in effect in Washington, which has a bill that would reopen some of the LTC exemptions. 

For a more extensive discussion of state issues, see this GRIST (particularly sections 1, 6 and 8): Top 10 health, leave benefit compliance and policy issues in 2025. 

 Finally, here’s looking at you, with some ideas on how to take action: 

1. Get involved. Many trade associations have lobbying and advocacy resources on benefit and insurance issues. For issues of great import, consider comment letters or even testifying at hearings. For most states, regular sessions will adjourn by the end of May. Only Michigan, New Jersey, Ohio, Pennsylvania and Wisconsin are scheduled through the end of 2025. 
2. Seek vendor input. Engage your insurers, PBMs and other third-party vendors, who often closely monitor statehouse activity. 
3. Update your executive team. These issues are important. Senior management needs to know how state laws may impact the workforce.  

This overview is intended to help benefits professionals avoid shock if proposed state legislation is signed into law — unlike Louis, who was “shocked, shocked” to find gambling at Rick’s Café Américain.