Day 10: Policy Pirouettes & Legislative Leaps

On the tenth day of Work Comp, the industry gave to me…

Ten lords leaping through legislation — and every one of them rewriting the rules.

If 2025 has taught us anything, it’s that the workers’ compensation landscape is moving fast. Statehouses are busy, regulators are active, and compliance teams are doing their own version of holiday cardio just trying to keep up. This year’s shifts haven’t been subtle — they have had massive impacts on the industry.

State Legislatures Are in Full Sprint

2025 brought a surge of state-level activity, with lawmakers tackling everything from mental health coverage to gig worker classification.

According to NCCI’s 2025 Regulatory & Legislative Trends, the biggest areas of movement include:

• PTSD and mental injury expansions
• Ongoing marijuana compensability debates
• Worker classification reforms
• State-level single-payer proposals impacting comp structures

The result? A whole bunch of new rules that require constant vigilance.

Rates Are Jumping, Dropping, and Zig-Zagging

Some states are lowering workers’ comp rates to ease employer costs, while others are increasing them due to medical reimbursement pressures.

A Reuters Legal review tells us that many states are pushing rates downward while simultaneously expanding worker protections.
Meanwhile, Agency Height’s 2025 market outlook highlights states like Florida where physician reimbursement changes have pushed rates upward.

Medical Inflation Keeps the Pressure On

Even with declining claim frequency, medical severity continues to rise.

InsureDirect’s 2025 analysis points to:

• Persistent medical inflation
• Shifts in pharmacy utilization
• Stabilized but still influential telemedicine adoption

This means total claim costs may rise even in states with decreasing base rates.

Remote & Hybrid Work Are Redefining Compensability

The modern workforce isn’t tied to a single location — and people are adjusting.

Risk Placement Services reports that remote work continues to reshape compensability, ergonomics expectations, and employer safety obligations.

The “where” of work has never mattered more.

Mental Health Takes Center Stage

2025 continues the trend of expanding mental health recognition in workers’ comp.

Sedgwick’s 2025 insights highlight rising psychological injury claims and expanded benefits for high-risk professions.

This isn’t a side conversation anymore — it’s core to the system.

The Aging Workforce Changes Everything

Longer recovery times. Higher severity. More comorbidities.

Sedgwick identifies the aging workforce as one of the top four forces shaping the future of workers’ comp in 2025.

Return-to-work strategies must evolve accordingly.

AI & Automation Are Reshaping Compliance

From predictive analytics to automated compliance monitoring, technology is no longer optional.

CorVel emphasizes the rapid rise of generative AI in claims, risk management, and regulatory tracking.

The future is faster — and smarter.

With ten lords leaping through legislation (and regulators tossing in a few pirouettes of their own), 2026 will demand a new level of responsiveness.

To stay ahead, we as organizations in the work comp space must:

• Track state-specific changes proactively
• Leverage technology to anticipate shifts
• Support holistic worker well-being
• Adapt to demographic and workforce realities

If Day 10 has a lesson, it’s this: stay agile, stay informed, and keep leaping — because the next verse of Work Comp is already being written.

#12daysofworkcomp #agilitymatters