As AI continues to evolve and see greater utilization in healthcare, legislators across the country have introduced various bills to regulate AI within the healthcare and insurance industry, aiming to set rules around what decisions AI can and cannot make.
This trend could inevitably create conflict with federal initiatives, as the White House issued an Executive Order with the intent “to sustain and enhance the United States’ global AI dominance through a minimally burdensome national policy framework for AI.” Notably, the Executive Order tasks the U.S. Attorney General to establish an AI Litigation Task Force whose sole responsibility shall be to challenge State AI laws inconsistent with this policy.
Language within the Order indicates that states that do not adjust their laws could lose certain funding. Regardless, starting at the end of 2025 and throughout 2026 so far, state legislators continue to introduce such bills.
Alabama Senate Bill 63 would regulate currently unrestricted AI use in health benefit decision‑making by prohibiting insurers from relying exclusively on AI for coverage determinations and would require the decision to approve or deny coverage to always be made by a qualified healthcare professional.
Furthermore, this bill would require disclosure when AI is used and authorizes the Department of Insurance to take enforcement action for violations. If enacted, becomes effective October 1, 2026.
Additionally, Alabama House Bill 280 would establish an AI-assisted virtual health platform for rural communities under the Alabama Health Command. Along with required privacy standards, this bill would prevent AI from replacing licensed clinical work.
If enacted, this bill would become effective October 1, 2026.
Florida House Bill 527 (Senate Bill 202) would allow workers’ comp carriers, insurers, and HMOs to use algorithms, AI systems, and machine learning systems to assist in processing claims. The bill prohibits the use of these tools as the sole basis for determining whether to reduce claim payment, deny claims, or to portion the claim. Qualified human professionals would be required to finalize these decisions
Additionally, carriers, insurers, and HMOs would be required to include certain information in denial communications to claimants. The bill also authorizes the Department of Financial Services (DFS) and the Office of Insurance Regulation (OIR) to conduct examinations & investigations. Furthermore, the bill would require the disclosure of AI use to claimants. If enacted, this bill would be effective July 1, 2026.
Hawaii House Bill 1787 would establish restrictions on the use of artificial intelligence, algorithms, or other software tools for purposes of decision-making in health insurance utilization reviews. Such decisions would require a licensed health care provider to review all adverse actions by the health carrier.
If enacted, this bill would take effect upon approval.
Kentucky House Bill 455 would restrict the use of artificial intelligence by certain licensed professionals in therapy and psychotherapy services. Among many stipulations, the bill would require clinician oversight for the use of AI, written consent for AI-assisted recorded sessions, and restrict AI from interacting directly with clients.
If enacted, this bill would take effect immediately upon enactment.
New Hampshire House Bill 1406 would prohibit AI from overriding clinical judgment in health insurance decisions. Furthermore, carriers would be required to maintain records identifying the use of artificial intelligence tools in claims processing and make such records available to the insurance department upon audit. Violations may result in fines or restitution for care delays.
If enacted, this bill would go into effect January 1, 2027
Oklahoma House Bill 3675 would prohibit AI-generated adverse determinations in health insurance utilization review, requiring human professional review. Furthermore, this bill would allow the Insurance Commissioner to audit automated systems for such systems.
If enacted, this bill would go into effect on November 1, 2026.
Pennsylvania House Bill 1925 would require human review for insurance and healthcare decisions involving AI. The bill states that AI-based algorithms cannot supersede human healthcare provider clinical decision making, that such algorithms must be fairly and equitably applies, must not discriminate against patients in violate of State or Federal law, and that their performance must be periodically reviewed for accuracy and reliability.
Facilities that use AI to generate claims communications would be required to list a disclaimer that such communications were generated with AI, and provide clear instructions on how to contact a human healthcare provider or relevant employee of the facility within question.
If enacted, this bill would go into effect one year after the enactment date.
Additionally, Pennsylvania Senate Bill 1113 would establish comprehensive AI oversight across facilities, insurers, and Medicaid/CHIP plans in clinical decision-making. The bill would require AI disclosures in decision making, responsible use standards, recordkeeping, and penalties.
If enacted, this bill would go into effect one year after becoming law.
Virginia Senate Bill 586 would require health carriers to disclose how AI is used to manage claims coverage and to submit all information enabling decisions made by artificial intelligence to the State Corporation Commission upon request. Furthermore, the bill prohibits exclusive AI reliance for adverse determinations, mandates expedited external review, and enables civil penalties up to $50,000 and potential license suspension.
If enacted, this bill would go into effect July 1st following the adjournment of the session.
For ongoing coverage of the latest legislation and policy updates impacting workers' comp, visit the Healthesystems Advocacy & Compliance page for our weekly Regulatory Recap.
