Sandy Shtab, Healthesystems’ VP of Industry and State Affairs comments on high-level regulatory trends impacting workers’ comp.
Workers’ comp has never been governed by a single-threaded, unified framework. It operates at the intersection of insurance regulation, healthcare delivery, pharmacy oversight, labor and employment law.
In the last few years, technology policy has become a bigger component of this framework and understanding how this component fits into these other systems has become a growing part of the conversation. The complexity is not new, but what is new is the rapid pace at which these separate systems are evolving – often independent of each other – and the increasing need to reconcile how they interact in practice.
As we move through 2026, three themes continue to surface with lawmakers, regulatory agencies, and insurance leaders; the regulatory silos that exist today, how they relate to policymaking around existing and new technologies, and the steady march towards broader acceptance of medical marijuana.
Individually, each presents manageable challenges. Collectively, they highlight the importance of looking at and pacing regulatory change in a way that is both thoughtful and ensures that policy decisions reflect the way workers’ comp ecosystems operate in the real world.
A persistent challenge facing workers’ comp stakeholders is the way well-intended regulations are sometimes developed in isolation from adjacent or interdependent systems.
Regulation of pharmacy benefit managers (PBMs) is a clear and continuous example of regulations developed in isolation from related systems. States continue to consider legislation to address issues within commercial or group health PBM models, without always accounting for the many systemic differences that exist in workers’ comp.
In some cases, proposed reimbursement requirements for pharmacies exceed what workers’ compensation fee schedules allow for dispensing, creating inherent conflicts between statutes that were not designed to operate together. These situations do not reflect a lack of oversight or concern, but rather the complexity of applying uniform solutions to multiple programs – some of which are not in need of a solution.
These scenarios also present compliance conflicts for PBMs who serve injured workers. Similar compliance challenges exist in the regulation of artificial intelligence and claims automation.
Several states are considering bills that would place guardrails around algorithmic decision making, often without clear differentiation between rules‑based systems, predictive analytics, and large language models. In workers’ comp claims, many of these tools have been in use for years to support medical bill review, utilization review, and claims processing. As oversight evolves, clarity around definitions and use cases becomes increasingly important, particularly during carrier audits and compliance reviews.
The takeaway here is that when regulatory frameworks collide, the result is rarely intentional disruption, yet it can create operational friction, legal uncertainty, and additional compliance requirements for insurers, PBMs, and claim administrators who are navigating multiple, sometimes conflicting, requirements.
One way to bridge these gaps is through ongoing outreach and education. Workers’ comp is a mature system with established care models that balance cost containment, timely access to treatment, and return to work as the ideal claim outcome. Regulations developed with a clear understanding of how these models function together are more likely to reinforce, rather than disrupt, those goals.
And education must not be a “one and done” effort. As these technologies evolve and new stakeholders enter the conversation, continued engagement between regulators, legislators, and industry experts is so essential. Thoughtful planning around education and advocacy means helping lawmakers and regulators understand the existing processes before layering on new requirements or restricting processes that are functioning effectively today. This type of engagement can help ensure any proposed reforms achieve their intended purpose without unintended consequences.
Few topics illustrate regulatory complexity better than medical marijuana. In the face of recent federal rescheduling for the medical side of marijuana, momentum continues to build, supported by bipartisan acknowledgment of cannabis’s medical use. Rescheduling does not erase existing state medical marijuana programs, nor will it automatically transform cannabis products into FDA‑approved prescription drugs.
For workers’ comp, the implications are highly nuanced.
Many states have taken different approaches to marijuana coverage and reimbursement; some have established specific fee schedules; others rely on medical treatment guidelines as their standard for coverage. Rescheduling introduces the likelihood that these frameworks will need to be revisited, especially if cannabis derived products enter the traditional pharmaceutical manufacturing and distribution channels with assigned NDCs and manufacturer pricing.
The result is unlikely to be a single, sweeping reform. More realistically, stakeholders should prepare for a wave of state‑specific legislative and regulatory activity aimed at harmonizing existing laws with a new federal classification. This will require careful coordination to avoid conflicts with established pharmacy fee schedules and reimbursement methodologies.
Technology is reshaping the injured worker experience, sometimes outside of formal systems used by the payer. AI‑enabled tools are widely accessible, and often free for anyone with an internet connection and a smartphone. Injured workers can seek out real‑time feedback from AI agents about their injury type, related medical conditions, treatment options, recovery timelines, and even managing conflicts that might otherwise escalate to attorney involvement.
As carriers and administrators adopt new tools to improve communication with injured workers, those injured workers are increasingly informed and better prepared to advocate on their own behalf, both with their claims professional and with their medical providers. They are using technology to better understand their rights, navigate authorization of care and other administrative processes, and be more actively involved in their claim.
This shift presents both opportunity and responsibility. Technology can support better outcomes, clearer communication, and more efficient claims resolution. The challenge lies in ensuring regulatory frameworks evolve in a way that enables innovation while maintaining appropriate oversight and trust.
Workers’ comp has always adapted – sometimes incrementally and sometimes imperfectly – and today’s environment calls not only for adaptability, but also a willingness to learn in real time.
Policymakers, regulators, and industry stakeholders are navigating unfamiliar terrain, from AI governance to cannabis policy. It is up to all of us to help them understand how to move forward without breaking what is working today. The path forward is not about moving faster just to move fast, but about moving deliberately.
As policies evolve, it’s critical that lawmakers understand the ecosystem better before attempting to reshape it, aligning policies across silos and they must recognize that injured workers themselves are becoming more informed participants in the system. Given the pace of change, running before walking may feel unavoidable. But taking one deliberative step at a time, with a shared understanding and always in collaboration, remains the most reliable way to ensure workers’ comp continues to serve those it was designed to protect.
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