In our quest to provide you with information that might affect Workers’ Compensation insurance, here are the latest developments from a recent “2024 Regulatory and Legislative Trends” report from the National Council on Compensation Insurance. This article will cover legislative updates on mental injury, marijuana and psychedelic hallucinogens, classifications for freelancers and independent contractors, and single-payer health insurance.
As with all Workers’ Comp matters, many of these issues are state dependent. However, they are still reflective of growing trends on a national level. Be sure to check with your Workers’ Comp advisor or carrier for more in-depth information for the states in which your business operates.
Mental Injuries in the Workplace
Many states are increasingly focused on mental injuries in the workplace. For example, Alaska enacted comprehensive Workers’ Comp reform in May of 2024, which included a greater recognition of “the mental health challenges faced by first responders, correctional officers, emergency medical dispatchers, peace officers, and similar professions.” The reform also addressed an emphasis on returning to work over retraining for a new career, updated Workers’ Comp reimbursement rates, simplified the administrative process, and streamlined timelines for filing a claim. Arizona and Oklahoma passed similar laws based around the presumption of Post Traumatic Stress Disorder (PTSD) compensability for certain categories of workers, including first responders. Many other states, including Wisconsin, Florida, Missouri and Iowa, are also considering coverage for PTSD and other mental health related injuries beyond first responders.
Reimbursements for Marijuana and Hallucinogens
The legalization of marijuana continues to increase across the many states in our nation. While not directly related to Workers’ Comp, Pennsylvania and Florida are considering joining other states that have legalized it for recreational and medicinal use. States like Massachusetts and New Jersey have also introduced legislation that would allow reimbursement for marijuana treatments for certain Workers’ Comp claims, such as first responders and peace officers.
To be clear, marijuana is still illegal at the federal level, though a Federal bill has been introduced to reclassify it under the Controlled Substances Act. For that reason, carriers and businesses are also looking at how it will affect Workers’ Comp claims.
Similarly, Missouri, New Jersey and New York have introduced bills to legalize psychedelic hallucinogens like midomafetamine (MDMA), which has been shown to be an effective treatment for PTSD in a clinical setting, for recreational and/or medicinal use. While those proposals do not pertain to Workers’ Comp, Arizona is now requiring Workers’ Comp coverage for MDMA therapy for “firefighters and certified peace officers (first responders).” Note that this is pending FDA approval.
Classifications for Independent Contractors
As the freelance and independent contractor economy continues to grow, many states are revisiting how these workers are classified. This could affect whether or not they would be eligible for Workers’ Comp, among other benefits. In March of 2024, the U.S. Department of Labor established a rule under the Fair Labor Standards Act that established an “economic reality” test with multiple factors used to determine a worker’s eligibility to be classified as either an employee or an independent contractor.
Many states are also following that lead. A bill was introduced in 2024 to repeal California’s long-used “ABC test,” which determines a worker’s classification as an employee or independent contractor. West Virginia, New York, and Pennsylvania are also considering legislative measures to re-address worker classification criteria. This could signify a monumental shift in how freelance workers and independent contractors are classified, allowing them to become eligible for Workers’ Comp benefits.
Transportation network companies, in particular, have been under increased legislative scrutiny in many states. For example, several bills have been filed in Massachusetts that would make these drivers official employees of the transportation network company for which they drive. In addition, survivor death benefits to drivers in Washington have been extended to the dependents of app-based drivers, like Uber and Lyft.
Single-Payer Health Insurance
A single-payer health insurance system would bring the potential for big changes to existing Workers’ Comp laws. Though no state has yet to implement a single-payer health insurance system, Rhode Island, Maryland, California and New York have all introduced legislation toward the goal of single-payer health insurance, which includes sections addressing Workers’ Comp coverage.
While the State-Based Universal Health Care Act of 2023 seeks to give additional support to state-based universal healthcare programs and doesn’t specifically mention Workers’ Comp, any single-payer system proposed on a Federal level, such as Medicare for All, would have to integrate existing Workers’ Comp statutes.
Final Thoughts
As an employer, it can be hard to keep up with shifting legislative requirements. We recommend focusing on what you can control – like choosing the right partner to provide Workers’ Comp coverage that keeps you up to date and protected. Direct WorkComp makes that part easy – click here for a free quote!
