What to expect from the states in 2024 

Skyscrapers tend to have two types of elevators. The first stops at every floor within a certain range. The second is an express, taking you straight to the top. With fall elections looming, states’ 2024 legislative cycle is an express elevator. By Memorial Day, statehouses will largely be vacant. As a result, important bills with bipartisan backing should move quickly. Over 40 states have regular sessions; bills that enhance re-election messaging may “cut in line.” Ultimately, most bills will die in committee. Successful monitoring requires attention and effort. 

Attention: Key areas of focus

Here is a summary of the benefit, insurance and leave issues that – in the words of The Jeffersons theme song – may be “movin’ on up” to the proverbial “deluxe apartment in the sky”:  

• ERISA preemption. This law turns 50 years old on Sept. 2 and will be in the spotlight all year. Recent state legislative efforts – targeting pharmacy benefit managers (PBMs) – have taken aim at self-funded ERISA plans in the wake of the US Supreme Court Rutledge decision. In 2023, though, the 10th Circuit Mulready decision invalidated an Oklahoma PBM law on ERISA preemption grounds. Any US Supreme Court resolution of Mulready will probably occur during its 2024-2025 term. One state legislative approach is to restrict contract provisions between PBMs/third-party administrators and providers. We anticipate state legislatures will test the limits of Rutledge and Mulready this year. 

• Prescription drugs. The US Food and Drug Administration’s approval of Florida’s drug reimportation program may have a ripple effect; five other states have submitted proposals to the FDA. Employer-sponsored coverage impact is unclear. Expect major PBM legislation in states like Arizona, Florida, Iowa, Illinois, Indiana, Missouri and New Jersey. Focus will be on dispensing fees, mail order, affiliated pharmacies, prescription drug rebates at the point of sale, spread pricing and transparency/reporting. More states, like Georgia and Ohio, will explore insulin cost-sharing caps. In addition, measures that would prop-up drug manufacturer financial assistance programs are under consideration in New Hampshire and Wisconsin. This issue may receive clarification at the federal level after a DC District Court decision related to the Affordable Care Act. Florida’s Office of Insurance Regulation should issue regulations implementing last year’s Prescription Drug Reform Act, hopefully addressing its application to self-funded plans.  

• Paid leaves. While the US House and Senate work on a paid family and medical leave (PFML) proposal, state PFML activity should abound, either as a mandate or insurance option (popular in 2023 and under consideration in South Carolina). Keep an eye on Illinois, Kentucky, Missouri, New Mexico and Pennsylvania. Program expansion is on the plate in states like New York and Washington. Maryland may delay the start dates of its PFML program, currently slated to begin in Oct. 2024 for contributions, and Jan. 2026 for benefits. More states and cities may take up paid sick and safe leave (PSSL). Michigan’s supreme court should soon resolve the fate of the state’s PSSL law. Expect an uptick in bereavement/reproductive loss leave laws.  

• Telehealth. Look for more states to join interstate compacts, like PSYPACT, to address healthcare access. More states like Michigan are likely to examine fully insured plan reimbursement parity between telehealth and in-person providers. Some legislatures will review telehealth prescription practices. FDA Rx telehealth flexibility at the federal level is due to expire at the end of 2024. 

• Insurance coverage mandates. Each year, new state laws require fully insured coverage of additional services or adherence to higher standards. This year’s mix includes doula services (New York and Pennsylvania), fertility treatment (Colorado and New Jersey) and ground ambulance balance billing (Florida and Massachusetts). These laws generally do not apply to self-funded ERISA plans. 

Bottom line: The above five issues should dominate the view from the observation deck. 

Effort: Key action steps

When the elevator doors close, it is time to move. Here are some ideas on how to take action: 

• Engage with peers, trade groups. Local, statewide and even federal trade associations often advocate on benefit and employment issues. Comment letters and hearing testimony are options. 

• Leverage vendor relationships. Seek input from – and offer input to – insurers and PBMs. They typically have an active presence at the state capitol. 

• Keep your superiors informed. These issues are essential to an engaged workforce. Senior management needs to know. Company leaders may have relationships or connections that offer another avenue for making your organization’s point of view heard. 

Bottom line: Employers have stories to tell that can be compelling and convincing to legislators and regulators.