2025 NCCI Annual Updates on State Workers Comp Regulations and Legislation
Overview:
Here’s a look at how workers comp legislation and rates are trending nationally.
Workers’ Compensation Rate Cuts:
For 2025, the National Council on Compensation Insurance (NCCI) recommended a 6.1% overall average reduction in workers’ compensation premium rates for the voluntary market. This reduction aligns with the ongoing trend of decreasing rates, reflecting enhanced workplace safety measures and fewer claims.
Mental Injury-Related Legislation:
NCCI monitored 86 bills addressing workers’ compensation for workplace-related mental injuries, including 71 related to PTSD. The focus remains on coverage for first responders, but some states are expanding coverage to additional workers. Connecticut led the way by extending eligibility for workers’ compensation benefits for post-traumatic stress injuries to all employees covered by the workers’ compensation law. Other states such as Idaho, Missouri, Nevada, Tennessee, Texas, Virginia, and Washington have enacted similar legislation. These bills establish coverage for PTSD and other psychological injuries, expand coverage to more employee types, and create a presumption of compensability for PTSD.
Marijuana Reimbursement:
The debate over marijuana reimbursement for workers’ compensation treatment continues. In 2025, Kentucky enacted SB 47, legalizing medical marijuana but stating that workers’ compensation carriers are not required to reimburse costs associated with its use. North Carolina (SB 3) and Pennsylvania (SB 846) are considering similar provisions, while Massachusetts (H 1949) and New York (A 4713/S 2568) are exploring legislation that would allow reimbursement for medical marijuana in workers’ compensation claims. States like Idaho, Kansas, and Nebraska introduced bills to legalize medical marijuana with explicit provisions that reimbursement is not required.
Hallucinogens and Psychedelics:
States are beginning to explore the legalization of substances such as LSD, mescaline, psilocybin, peyote, and other natural hallucinogens for medical use. Colorado and Oregon have legalized psilocybin, and Washington enacted SB 5263, which establishes a psilocybin task force and a pilot program for psilocybin therapy services. Other states, including California, Connecticut, Massachusetts, Montana, New Hampshire, New Jersey, New York, Rhode Island, Utah, and Virginia, proposed similar legislation, though many bills did not advance. These efforts are part of a broader trend to explore these substances as potential treatments for PTSD, anxiety, and depression.
Key Takeaways for Employers:
- Increasing Salary Thresholds: Employers should stay informed about potential changes to federal salary thresholds for exempt employees, as these are expected to rise to reflect modern wage standards.
- State-Specific Laws: States like California have higher salary thresholds for exempt employees, and employers must comply with these local regulations.
- Misclassification Risks: Proper classification of employees is critical to avoid liabilities, including back pay and penalties.
- Tracking Non-Exempt Employees: Accurate timekeeping is crucial, especially for remote or hybrid workers whose after-hours work could be compensable.
- Regular Audits: Conducting regular pay audits and reviewing job classifications can help identify and rectify compliance gaps.
Employers who proactively address these issues will not only mitigate legal risks but also foster a fair and transparent workplace.
Conclusion:
The landscape of workers’ compensation regulations continues to evolve, with significant focus on mental health, substance use, and correct employee classification. By staying informed and compliant with federal and state laws, employers can ensure fair compensation practices and build trust with their workforce. Accurate tracking, regular audits, and ongoing education are key to navigating these changes successfully.
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