Federal and state legal actions in the past quarter continue to reshape the legal and compliance landscape for health plans in the areas of abortion and gender-affirming care.
“We have seen a surge in federal agency enforcement, new rulemaking and litigation, as well as ongoing state developments that both challenge and reinforce these federal efforts,” Laura Hancock, ERISA compliance and state law attorney for Lockton, wrote in a new report.
The report highlighted the most consequential legal shifts and emerging trends that health plan sponsors and employers should be tracking as they navigate an increasingly complex regulatory environment.
Abortion and reproductive care. States are increasingly polarized on abortion, with conservative states intensifying restrictions through litigation, legislation and federal challenges, while progressive states expand access and protections. Extraterritorial battles continue over telehealth, mailed abortion prescriptions and shield laws. The abortion pill mifepristone has re-entered the conversation as the cornerstone issue for a federal vs. state showdown.
“The legal landscape around abortion access is evolving at a breakneck pace, with state officials, legislatures and courts engaged in what increasingly resembles a high-stakes chess match,” Hancock said. “Each lawsuit, legislative bill or regulatory petition triggers a swift and often escalatory response from opposing jurisdictions. The resurgence of mifepristone litigation in particular highlights a deepening divide between state and federal authority over abortion access.”
For employers, this dynamic environment demands agile compliance strategies as the rules governing access and liability continue to shift across state lines. “While no action is required for employers at this time,” she said, “we recommend remaining engaged on state-level updates to keep pace with new developments as they arise.”
Gender-affirming care. Federal and state clashes over gender-affirming care have intensified, with federal agencies advancing restrictions while states fracture along partisan lines amid deepening legal divides over what constitutes discrimination under both state statutes and federal laws such as Title VII and ACA Section 1557.
“While this quarter saw continued activity around gender-affirming care at the state level, many of the meaningful developments this summer were federal in nature,” Hancock said. “Because federal directives increasingly influence how states regulate care -- and whether federal and state inconsistencies surface -- staying apprised of both levels of regulation is essential for anticipating enforcement risks and aligning policy strategy.”
Other updates to state laws and programs affecting employee health and welfare benefits. San Francisco’s Health Care Security Ordinance increased rates for 2026; new hourly health care benefits are required under the Los Angeles Living Wage Ordinance and Hotel Worker Minimum Wage Ordinance; Illinois’s commuter benefit law extends benefits to part-time employees; and Washington’s Partnership Access Lines Fund announced 2026 covered lives assessment rates.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.