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Key California Health & Welfare Bills to Watch in 2026: Part 1

This year, California has seen an uptick in legislation that could impact health and welfare plans. In fact, there are so many bills this year that we are separating this blog post into two parts. This part focuses on bills that impact arbitration of claims, coverage mandates and electronic claims filing. Next week’s blog will detail bills concerning prescription drugs, rate review, mental health parity, mid-year election changes, privacy and other topics.

Right now, the California legislature is in recess. When the legislature returns to Sacramento on August 3, 2026, the remaining bills under consideration will have an August 31, 2026 deadline to be passed by both houses. Unless specified otherwise in the descriptions below, none of these bills impact self-funded plans in California, which are governed by the Employee Retirement Income Security Act (ERISA).

Arbitration

AB 1770

This bill would give the California Attorney General oversight of managed health plans to ensure that plans requiring binding arbitration to settle disputes comply with the arbitration requirements of the Knox-Keene Health Care Service Plan Act of 1975 and that arbitration is conducted pursuant to the California Arbitration Act and medical malpractice arbitration provisions in the California Code of Civil Procedure.

The intent behind this bill appears to be to level the playing field for insureds who bring arbitration actions against their HMOs. Although Kaiser Permanente has expressed concerns regarding the bill, it is currently unopposed. If enacted, it will have little to no impact on employer plans, but it may make it easier for plan members to challenge denials made by their managed care plans.

ACA

AB 1907

This bill would expand the existing auto-enrollment process in Covered California. Under current law, a loss of eligibility in Medi-Cal will trigger an auto-enrollment in the lowest-cost silver plan available, or a plan that matches the previous Medi-Cal plan. AB 1907 would expand auto-enrollment to persons who had submitted a Medi-Cal application but were found ineligible.

The bill also would require health carriers to abide by the annual enrollment period and effective dates of coverage in the individual market as established by federal regulations. This bill has been approved by the Assembly and by the Senate Health and Appropriations Committees and is eligible for further consideration when the Legislature resumes session on August 3, 2026.

Those who obtain coverage on the individual market would likely benefit from the predictability of tying the California open enrollment period to the federal one. While the auto-enrollment expansion may lead to more individuals receiving subsidized coverage on Covered California, the impact on employer plans is likely to be minimal.

SB 1049

This bill would grant a health care provider 90 days to submit a corrected claim after a carrier denies a claim or sends notice of overpayment for a claim based on a defect that may be remedied by submitting a corrected claim. It would also prohibit a carrier from denying a corrected claim on the grounds that the health care provider did not submit the claim within a deadline other than the 90 days specified in this legislation.

According to background information submitted by the bill’s author and sponsors, obstetrics practices throughout California received notices over the past year that their obstetric claims were paid incorrectly. Many providers were unaware of a new diagnostic coding requirement, which had existed since 2019 but had never been enforced.

Once the providers learned the error involved a missing diagnostic code, practices promptly resubmitted corrected claims; however, many of the claims were denied as untimely, because the plan’s 90-day filing window (which is 90 days from the date of service) had long expired. If enacted, this legislation would make it easier for health care providers to fix errors in billing submitted to health carriers.

Coverage mandates

Every year, legislators submit a handful of bills seeking to mandate that certain treatments are covered, or covered without cost to the insured, by insurers. While the cost of each of these bills can be minimal, over time these mandates can lead to higher premium costs. For that reason, the California Legislature established the California Health Benefits Review Program (CHBRP) to analyze and report to the legislature on the effectiveness and cost of each such proposal.

SB 331

This bill, referred to as the Let Kids Hear Act, would require fully insured large group health plans to include coverage for hearing aids for covered persons under the age of 21, up to a maximum of $3,000 in coverage per hearing aid.

It would also add an annual hearing exam and one hearing aid every three years to the California benchmark plan for individual and small group coverage, if the federal government approves a new essential health benchmark plan for the state. This bill has been approved by the Senate and by the Assembly Health Committee. Once the legislature returns from recess, this bill may be heard by the Assembly Appropriations Committee before it is eligible for a floor vote.

In its analysis of the bill, CHBRP estimated that the legislation would increase large group employer premiums by 0.02% and employee contributions toward premiums by 0.01%.

AB 687

Under current law, carriers must provide coverage without cost sharing for colorectal cancer screening tests that receive a grade of A or B by the United States Preventive Services Task Force, as well as for a required colonoscopy following a positive result on a test with those grades.

This bill would additionally require coverage without cost-sharing if the screening test is approved by the United States Food and Drug Administration (FDA) and either meets requirements for coverage established by the federal Centers for Medicare and Medicaid Services or is included in the most recently published guidelines from the American Cancer Society. As such, the bill would increase the number of screening tests that carriers would be required to cover without cost-sharing.

This bill was introduced in the legislature on June 15, 2026, through a gut-and-amend—a process by which the entire contents of a bill are removed and substituted with other proposed legislation. As a new bill, AB 687 has not been analyzed by either the Assembly or Senate Health Committees and it has not been submitted to CHBRP for analysis.

AB 1682

This bill would require carriers to provide coverage for scalp cooling as prescribed by a health care provider in connection with chemotherapy. The bill specifies that the cost-sharing for scalp cooling is no less favorable to the patient than the cost-sharing applied to other oncology supportive care services.

It defines “scalp cooling” as the use of a medical device or system cleared by the federal FDA and applied to the scalp before, during, or after the administration of chemotherapy to reduce the incidence or severity of chemotherapy-induced hair loss. This legislation has been approved by the Assembly and the Senate Health Committee. It is scheduled for a hearing in the Senate Appropriations Committee on August 3, 2026.

In terms of cost analysis, CHBRP has estimated a premium impact of $0.015-$0.027 per member per month.

AB 1843

This bill would prohibit carriers from subjecting direct-acting antiviral drugs that are medically necessary for the treatment of hepatitis C to prior authorization requirements. This legislation has been approved by the Assembly and the Senate Health Committee. It is scheduled for a hearing in the Senate Appropriations Committee on August 3, 2026.

CHBRP estimates that, if enacted, AB 1843 would increase total annual premiums paid by employers and enrollees by $0.0020-$0.0134 per member per month.

AB 1906

This bill would require fully insured health plan coverage of FDA-authorized or FDA-cleared cervical cancer home test kits. The bill has been passed by the Assembly and approved by Senate Health.

Senate Appropriations has placed AB 1906 in the suspense file and therefore has not yet approved the bill. The bill must be approved by Appropriations by August 14, 2026, in order to move to consideration by the full Senate.

CHBRP has estimated a premium impact from AB 1906 of $0.0099 - $0.0099 per member per month.

AB 1970

This bill would prohibit a fully insured health plan from imposing step therapy as a prerequisite to authorizing coverage of any prescription drug used for the treatment of a serious mental illness or substance use disorder. This bill has been approved by the Assembly and by the Senate Health Committee. It will be heard in Senate Appropriations on August 3, 2026.

CHBRP estimates a premium impact range of $0.014 - $0.016 per member per month.

SB 950

This bill would require a fully insured health plan to cover all medically necessary and FDA-approved treatments or medications for the treatment of Alzheimer’s disease or other related dementia.

The bill would also prohibit a carrier from imposing step therapy protocols as a prerequisite to authorizing coverage of medically necessary treatments or medications approved by the FDA for the treatment of Alzheimer’s disease. This bill has been passed by the Senate and Assembly Health Committees. It will be heard by the Assembly Appropriations Committee after August 3, 2026.

In its analysis, CHBRP estimated a premium impact of up to $0.03 per member per month.

SB 1309

This bill would require carriers to provide coverage without cost sharing for follow-up screenings and diagnostic services for lung cancer after an abnormal or indeterminate screening result.

The bill has been passed by the Senate and by the Assembly Health Committee. The Assembly Appropriations Committee placed the bill in the suspense file. The bill must be approved by Appropriations by August 14, 2026, in order to move to consideration by the full Assembly.

CHBRP has estimated a premium impact range of $0.109 - $0.285 per member per month.

Insurance claims

AB 2499

This bill would require a carrier for a fully insured plan to accept, and confirm, electronic medical records and supporting documentation necessary to process a claim through a standard electronic submission method, and would prohibit a carrier from denying, pending, or delaying a claim solely because the plan’s or insurer’s systems are unable to accept documentation that otherwise meets state requirements.

The intent of this legislation appears to be to streamline and modernize the claims process. Insurers have pointed out that the vast majority of claims are already submitted electronically using plan-designated portals or existing interoperability standards. If enacted, the impact on employer-provided plans is expected to be minimal.

Keenan is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Clients are advised to consult with their own attorney for a determination of their legal rights, responsibilities, and liabilities, including the interpretation of any statute or regulation, or its application to the clients’ business activities.