May 31, 2022

A flurry of legislative activity started off the year, with 46 of 50 state legislatures in session. Prescription drug pricing and pharmacy benefit manager (PBM) restrictions took the spotlight as California, Michigan, Nebraska, New York, Oklahoma, Washington and West Virginia enacted new laws. Paid leave also garnered attention as California, Connecticut, Maine, New Mexico, Oregon, Washington and Washington, DC, looked to expand existing programs or considered new paid leave mandates. Illinois, New York and Washington updated their health plan reporting requirements. Insurance coverage mandates for services like contraceptives and abortion passed in California, Maine, New Jersey and Washington. Several states — including Indiana, Washington and Wisconsin — joined an interstate compact that makes it easier for group health plans to provide mental health services via telehealth.

Download the 13-page print-friendly PDF for full details. Here are highlights of what’s covered.
 

Prescription drugs

As state legislatures focused on prescription drugs, the National Academy for State Health Policy (NASHP) issued a report — Drug price transparency laws position states to impact drug prices — on transparency programs in 14 states. The report includes a state-by-state transparency law comparison chart, a similar chart on prescription drug affordability review initiatives and several state-specific reports. Although Congress continues to debate how to lower the cost of insulin (see, for example, S 3700 and HR 6833), California and Washington joined at least 19 other states in passing laws capping costs for patients.
 

State legislatures are increasingly including self-funded ERISA plans within the scope of laws regulating PBMs. This trend may continue in light of recent decisions — Pharm. Care Mgmt. Ass’n v. Wehbi, No. 18- 2926 (8th Cir. Nov. 17, 2021) and Rutledge v. Pharm. Care Mgmt. Ass’n, 140 S. Ct. 812 (2020) — that have held ERISA preemption does not apply to these state laws.
 

Paid leave

State paid leave efforts continued across the country as the prospects for federal legislation dimmed. Some jurisdictions — like California, Connecticut and Washington, DC — addressed COVID-19 leave. Leave expansion also landed on the agendas of jurisdictions like Oregon, Washington and Washington, DC. As the quarter ended, new paid family and medical leave (PFML) legislation advanced in Delaware (2022 Ch. 301, SB 1) and Maryland (2022 Ch. 48, SB 275). New Mexico is considering adding a PFML program. Maine’s new vacation law has a potential impact on the state’s existing earned paid leave law.
 

Health plan reporting

Group health plans received clarifications and updates about reporting responsibilities in three states. Employers with Illinois employees must now provide them with a comparison of their plan against a plan offering the state’s essential health benefits (EHBs). New York announced its 2022 covered-lives assessment (CLA) rate for healthcare payors that report and pay directly to the state. Washington’s Partnership Access Lines (WAPAL) assessment rates have decreased for the remainder of the 2022 fiscal year.
 

Insurance

This year saw expansion of abortion coverage in California, a broader definition of a disabled child in Maine, an increase in the duration of contraceptive coverage in New Jersey and Washington’s alignment of state balance-billing requirements with federal law.
 

Telehealth

Ohio enacted a telehealth law that requires cost-sharing parity between telehealth and in-person healthcare providers. Several states joined the Psychology Interjurisdictional Compact (PSYPACT), an interstate compact facilitating the practice of mental health services.
 

Other benefit-related issues

Single-payer healthcare and mandated long-term care (LTC) insurance are two areas where a couple of states are testing the waters but grappling with major cost considerations. California and New York considered a single-payer system, but the legislation did not make significant progress.

Rich Glass
by Rich Glass

Principal, Mercer’s Law & Policy Group

Katharine Marshall
by Katharine Marshall

Principal, Mercer's Law & Policy Group


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