5 trends in focus for employers

While several trends can impact workers’ compensation and workplace safety programs, five notable trends should be top of mind for employers at the start of 2026.

TREND 01

Compensability for mental health, post-traumatic stress expanding

Historically, mental injury claims in workers’ compensation — especially those that do not involve physical injuries — have been limited to first responders. The definition of “first responder” under workers’ compensation statutes can vary by state, but it often includes law enforcement officers, firefighters, paramedics, emergency dispatchers, and corrections officers.

Some states continue to focus on extending benefits to these workers or clarifying the benefits available to them. In 2025, for example:

Maine enacted legislation to permanently extend the presumption that post-traumatic stress disorder (PTSD) claims filed by first responders are work-related and thus compensable under workers’ compensation. This presumption was previously set to expire Oct. 1, 2025.
Nevada passed a bill to extend stress-related benefits to certain civilian employees of law enforcement agencies.
Tennessee established a presumption that PTSD diagnoses for first responders are work-related.
West Virginia enacted a bill that allows first responders to file workers’ compensation claims for PTSD.

Activity on this front has continued in 2026. In January, legislators in Arizona and Kentucky introduced bills that would allow first responders to claim benefits for PTSD as a result of workplace-related events. Another bill introduced in the Virginia House in January proposes to allow first responders to claim benefits for the exacerbation of existing PTSD and other metal health conditions.

Meanwhile, in Vermont, a Senate bill introduced in January would extend workers’ compensation benefits for PTSD to 911 dispatchers and other emergency communications workers; currently, PTSD benefits are available to police officers, firefighters, and paramedics. And in West Virginia, legislators are considering a bill that proposes requiring employers of first responders to provide them with access to paid traumatic event counseling from licensed mental health professionals.

Elsewhere, states are expanding or considering expanding coverage for mental stress or PTSD to workers in other professions. In some cases, benefits may be available to workers even if they do not sustain physical injuries — for example, to employees who witness deaths or gruesome nonfatal injuries, violent incidents, or other traumatic events in the workplace.

A notable example is New York: Effective Jan. 1, 2025, all employees in the state, regardless of profession, can file workers’ compensation claims for mental health injuries related to “extraordinary work-related stress." The law does not define what qualifies as "extraordinary"; the standard may ultimately be defined via case law.

Previously, mental health benefits were available in New York to first responders only. States that have recently considered allowing for similar claims to be filed by workers other than first responders include Connecticut, Oregon, Texas, Virginia, and Washington.

Workplace violence remains a persistent threat for employers and workers and represents a key driver of concerns regarding mental health. In 2023, the most recent year for which data is available from the U.S. Bureau of Labor Statistics (BLS), 740 workers died as a result of violent acts in American workplaces, accounting for 14% of all fatal occupational injuries. (See Figure 1.) Although violent acts are more prevalent in some industries, they can occur in any type of workplace.

Beyond fatal injuries, claims brought by survivors or witnesses of violent events can be unpredictable, as individual workers can respond to trauma in vastly different ways. In the aftermath of workplace violence, some workers may be able to return to work within days; others, however, might take years before they are comfortable returning to work, which can result in highly complex, lengthy, and costly claims.

At the same time, societal dynamics regarding mental health are changing. Nearly nine in 10 respondents (88%) to an April 2025 survey of American adults — conducted by The Harris Poll and the American Psychological Association — said having a mental health disorder is nothing to be ashamed of. Four-fifths of adult respondents (83%) said they were generally comfortable talking about their mental health.

Although survey participants recognized that mental illness continues to carry a stigma, this data reflects how mental health has become a more mainstream topic of conversation and could be cause for employers to be prepared for a potential uptick in claims in the coming years.

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of adult respondents (83%) said they were generally comfortable talking about their mental health.

TREND 02

Classification questions persist

The question of whether certain workers should be classified as employees or independent contractors — which determines their eligibility for workers’ compensation benefits and protection under various workplace-related laws — remains a key topic of discussion at both the federal and state level.

Most recently, in February, the DOL proposed a new rule that would rescind a 2024 Biden administration rule that introduced a six‑factor test for determining employee status. That 2024 rule had itself replaced a January 2021 regulation — issued near the end of President Trump’s first term — that prioritized two “core” factors as the main drivers of classification decisions. The newly proposed rule resembles the 2021 rule, with some modifications.

While employers must comply with the new DOL rule if it is enacted, it is important to note that state laws — including workers’ compensation statutes and tax laws — remain the primary factor in determining whether individual workers are eligible for workers’ compensation benefits. Individual states are taking their own varied approach to this subject. In 2025, Arkansas passed a bill that changes the test used to determine employment status, and Texas passed a law defining who counts as an independent contractor.

California, meanwhile, is weighing several proposals to carve out or extend exemptions from the state’s strict “ABC test” for determining a worker’s classification. The ABC test presumes that a worker is an employee unless all of the following criteria are met:

The worker is free from the control and direction of the hiring entity in the performance of the work.
The worker performs work that is outside the usual course of the hiring entity’s business.
The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

The proposed exemptions would apply to certain jobs and industries, including athletic coaches, commercial fishers, construction trucking, licensed manicurists, and merchandisers.

Elsewhere, several bills introduced in 2025 remain pending:

Iowa, New York, and Pennsylvania are weighing bills aiming to clarify how workers should be classified.
Pennsylvania is considering another bill that would require independent contractors to register their status.
A proposed bill in Minnesota would introduce a new wrinkle by assuming a worker is an employee unless proven otherwise through workers’ compensation and unemployment insurance rules.

Gig workers — including rideshare drivers and delivery workers — remained a big topic in several states’ 2025 legislative sessions. Wisconsin Governor Tony Evers vetoed a bill passed by the legislature that would have classified app-based and rideshare drivers as independent contractors. Similar bills are under consideration in Alaska and Iowa.

Some states are also exploring what benefits should be available to gig workers and independent contractors. A pending bill in Hawaii, for example, would establish a portable benefits program for gig workers, while a bill that would create a voluntary portable benefits program for independent contractors failed in 2025 in Rhode Island.

A proposed bill in Oregon that would create a task force to help ensure transportation network drivers can access benefits also failed. Meanwhile, a bill introduced in the Georgia House in January would make “gig nurses” who use apps to find work ineligible for workers’ compensation benefits.

TREND 03

Firefighters, medical professionals gaining cancer protections

Several states are exploring easing the path for certain workers who develop certain types of cancers — primarily firefighters — to collect workers’ compensation benefits. In 2025:

Connecticut and Nebraska introduced bills that would establish cancer presumptions specifically for firefighters.
A California bill proposed to expand the state’s existing cancer presumption to include active firefighting personnel who work at commercial airports or facilities operated by the Department of Defense and National Aeronautics and Space Administration.
West Virginia put forward a bill to extend its existing presumption for bladder cancer, mesothelioma, and testicular cancer in firefighters through July 1, 2028.

None of these bills have been enacted. The Connecticut bill did not advance out of a Senate committee, while the California and Nebraska bills remain pending. It is unclear whether the West Virginia bill will be carried over to the state’s 2026 legislative session.

Some states went even further by proposing coverage for more types of cancer. Hawaii proposed a bill — which remains pending — that would add coverage for firefighters for adenocarcinoma or mesothelioma of the respiratory system; cancers of the buccal cavity, colon, pharynx, and thyroid; and malignant melanoma. Utah passed a bill listing a wide range of cancers — including bladder, brain, colorectal, lung, lymphomas, ovarian, prostate, testicular, and more — as presumptive for firefighters.

Virginia legislators have been particularly active:

In 2025, the legislature enacted legislation to add coverage for certain throat cancers to its presumption for death or disability among first responders.

Also in 2025, legislators considered, but ultimately failed to pass a bill to add lymphoma and myeloma to the presumption. A new bill that would add lung cancer and non-Hodgkin lymphoma to the list of presumptive occupational diseases was introduced in the Virginia House in January 2026 and was approved by the Appropriations Committee on Feb. 9.

Two other Virginia bills that would have expanded cancer presumptions to sheriffs and deputy sheriffs failed to pass in 2025. A 2026 bill proposing to expand the presumption for pancreatic, prostate, and breast cancer to include sheriffs and deputy sheriffs who have completed at least five years of service has seen mixed progress.

Beyond firefighters, California is now weighing a new presumption for certain hospital employees who develop cancer along with COVID-19 and certain other infectious diseases, musculoskeletal injuries, PTSD, and respiratory diseases. The bill passed the state Senate in June 2025 and is currently being considered by the state Assembly’s Insurance Committee.

TREND 04

Drug policy evolving

Cannabis, or marijuana, remains a hot topic across several states and for both the White House and Congress. In December, President Trump signed an executive order directing the Department of Justice (DOJ) to expedite the reclassification of cannabis from Schedule I to Schedule III under the Controlled Substances Act (CSA). The order instructs the DOJ to finalize the rulemaking process to move cannabis to Schedule III, a category that includes drugs with “moderate to low potential for physical and psychological dependence,” according to the Drug Enforcement Administration (DEA).

A primary goal of the executive order is to close the gap between current usage and scientific knowledge by easing the bureaucratic hurdles that have historically made it difficult to study Schedule I substances. Since passage of the CSA in 1970, cannabis has been classified as a Schedule I drug, defined by the DEA as having “no currently accepted medical use and a high potential for abuse.” Other Schedule I drugs include heroin, LSD, and ecstasy.

Despite the federal government’s long-standing prohibition of the use of cannabis for medical purposes, Nebraska in 2025 became the 40th state to legalize medical use of marijuana, according to the National Conference of State Legislatures. (See Figure 2.) As of mid-2025, eight states allowed the limited use of low-THC, high-cannabidiol products for medical reasons, and recreational use of marijuana was legal in 24 states.

In 2025, recreational marijuana measures were approved by the New Hampshire and Pennsylvania House chambers; a proposal in Hawaii did not pass. Idaho, Indiana, Kansas, North Carolina, South Carolina, and Tennessee took up medical marijuana proposals that ultimately did not pass.

Tennessee weighed a combined medical and recreational legalization bill, while Texas passed a new law to expand its existing medical marijuana program. In South Dakota, lawmakers considered but rejected a proposal to repeal existing medical marijuana laws.

A growing number of states addressed whether workers’ compensation programs should be required to cover marijuana treatments. Idaho, Nebraska, North Carolina, Pennsylvania, South Carolina, and Tennessee introduced bills specifying that reimbursement for medical marijuana would not be required. Meanwhile, Massachusetts and New York considered proposals that would affirmatively require reimbursement; those measures remain pending.

In addition to concerns about the use of cannabis as a form of treatment, legislators are mindful of the potential role of marijuana in claimants at the time of injury. In January, a bill was introduced in the Utah House that would establish a presumption that would reduce workers’ compensation benefits for claimants who test positive for THC — the primary psychoactive cannabinoid found in marijuana — following workplace injuries.

Beyond marijuana, lawmakers are also focusing on psychedelic drugs, reflecting a broader national trend. Colorado and Oregon have previously legalized psilocybin, and in 2025 Colorado enacted a law allowing prescription medicines containing crystalline psilocybin pending federal approval. New Mexico approved psilocybin use in controlled settings for certain medical conditions.

Several states — including Illinois, Minnesota, and New York — introduced legislation to legalize adult possession or use of psilocybin or other naturally occurring hallucinogens. Additional states that proposed medical-use frameworks included Iowa, Massachusetts, Michigan, New York, and Washington, some explicitly stating that workers’ compensation reimbursement would not be required.

Pilot programs or study commissions related to psychedelic-assisted therapy were proposed in Illinois, Massachusetts, Nevada, and Texas. Rhode Island considered a bill to allow home cultivation of psilocybin for personal use, contingent upon federal rescheduling.

TREND 05

States weighing single-payer systems

In April 2025, two companion bills — together referred to as the Medicare for All Act of 2025 — were introduced in the U.S. House of Representatives and the Senate. The act proposes to replace the current U.S. multi-payer health system with a federally administered, universal single-payer program.

If enacted, the law would significantly alter how workers’ compensation programs are administered. Currently, workers’ compensation is the primary payer for work-related injuries, and Medicare is a secondary payer; the act would reverse or streamline this process to ensure immediate care without potential disputes. While claimants would receive care through the national program, workers’ compensation insurers might still be required to reimburse the national program for medical costs specifically related to work injuries.

To date, the two bills have not advanced beyond their initial committee assignments, and healthcare reform remains a highly contentious topic politically. States, meanwhile, are pursuing their own actions in this area.

Since the start of 2025, 10 states — Connecticut, Illinois, Maine, Massachusetts, Michigan, Minnesota, New York, Ohio, Rhode Island, and Vermont — have explored possible legislation that would establish single-payer health systems. The proposals in Maine, Massachusetts, Michigan, Minnesota, New York, and Rhode Island explicitly address workers’ compensation.

In 2025, Colorado passed a bill to study the feasibility of a single-payer system. Seven other states — Connecticut, Florida, Georgia, Hawaii, Maine, Maryland, and Oregon — have explored similar bills since the start of 2025.

So far, no state has introduced a single-payer model, which would raise significant questions for workers’ compensation — for example, how experience ratings would apply and how medical services would be financed.