As 2025 wraps up, four key states—California, Texas, Arizona, and Nevada—introduced new rules, rate changes, and compliance updates that directly affect how employers manage claims, budgets, and return-to-work efforts. This summary highlights the most meaningful changes and what they mean for your program going into 2026.

California: Higher Costs, New Presumptions, and Fee Schedule Changes

California saw the most regulatory activity this year.

Rate Environment

  • The state approved a pure premium rate increase, driven by rising medical severity and longer claim durations.
  • Employers should expect higher workers’ compensation costs, especially in high-exposure industries such as public safety, healthcare, construction, and agriculture.

Key 2025 Legislative Changes

Notable statutory updates include:

• Penalties for Unlicensed Contractors: Employers using unlicensed contractors now face new fines, and may be liable for work injuries if the worker should have been classified as an employee.

• Expanded Public Safety Presumptions: Airport firefighters and certain peace officers received additional presumptive protections for specific illnesses.

• Heat-Illness Presumption for Agriculture: If Cal/OSHA heat-prevention rules aren’t followed, heat-related injury is presumed work-related.

Medical & Pharmacy Fee Updates

  • California updated the Pharmaceutical Fee Schedule mid-year to better align with Medi-Cal.
  • The Official Medical Fee Schedule (OMFS) saw adjustments to physician, ASC, and hospital reimbursement rates.

Employer Considerations

  • Reassess vendor/contractor policies.
  • Update return-to-work and SJDB practices ahead of anticipated 2026 regulatory changes.
  • Ensure bill review partners are aligned with fee schedule updates.

Texas: Lower Rates, Modernized Hearings, and Expanded Public Safety Benefits

Texas continued its trend of improving claim performance in 2025.

Rate Environment

  • The state approved a substantial decrease in NCCI loss costs, providing broad-based premium relief.
  • Classification codes were updated to better match national NCCI standards.

2025 Legislative Changes

Major updates include:

  • Remote Contested Case Hearings: The Division of Workers’ Compensation may conduct hearings via videoconference.
  • Supplemental Benefits for Retired Firefighters & Peace Officers: Certain occupational disease diagnoses now require employer-funded supplemental income benefits.
  • Emergency Response Coverage Adjustments: Clarifications were made regarding which mutual-aid and specialized response personnel are covered under workers’ compensation.

Employer Considerations

  • Validate payroll class codes under the updated structure.
  • Ensure HR and legal teams are prepared for virtual hearings.
  • Public entities should incorporate expanded firefighter and peace officer benefits into budgeting.

Arizona: Fee Schedule Adjustments and Stronger Compliance Oversight

Arizona’s changes were lighter but still meaningful.

Rate & Regulatory Notes

  • The Industrial Commission of Arizona updated the medical fee schedule for 2025, with increases in some E/M and surgical codes.
  • ICA strengthened guidance on injury prevention, including heat stress, ergonomics, and workplace violence.

Claims & Compliance Trends

  • Claim frequency remained stable, but medical costs increased modestly.
  • ICA increased enforcement and penalties for late reporting and missing required forms.

Employer Considerations

  • Confirm accurate medical billing under updated schedules.
  • Reinforce claim reporting timelines with supervisors and HR partners.
  • Focus on safety interventions in high-risk industries.

Nevada: Major System Changes Through SB 317 and New Public Safety Rules Under SB 376

Nevada enacted some of the most substantial updates of 2025, with SB 317 and SB 376 reshaping requirements for insurers, TPAs, self-insured employers, and public-safety agencies.

Key 2025 Changes

SB 317 Highlights

  • Insurers and TPAs may now meet Nevada’s physical office requirement through a Nevada-based legal representative.
  • Self-insured employers may administer claims outside the state only if they have 30,000+ employees and maintain real-time adjuster availability in Nevada.
  • Temporary Partial Disability decisions must be issued within 14 working days.
  • Subsequent Injury Account eligibility now ends for injuries occurring after September 30, 2025.
  • A new tiered penalty structure applies to administrative violations (up to $3,000 for repeat offenses).
  • Insurers must maintain updated mental-health provider lists and file treating-provider lists annually between Sept 1–Oct 1.
  • Nevada adopted the ODG Drug Formulary, with full implementation required by July 1, 2027.

SB 376 Highlights (Heart & Lung Claims)

  • Firefighters, arson investigators, and police officers may seek out-of-panel treatment if fewer than 12 qualified specialists are available or cannot see the worker within 30 days.
  • Reimbursement for out-of-pocket or health-plan payments must be made within 30 days, or penalties equal to twice the unpaid amount may apply.
  • This access pathway applies only to claims filed on or after October 1, 2025.

Employer Considerations

  • Review provider lists, panel compliance, and mental-health provider availability.
  • Prepare for formulary-related changes to pharmacy approvals and prior authorization workflows.
  • Public entities should expect expanded medical access and reimbursement responsibilities for heart and lung claims.
  • Train HR and supervisors on new evidence standards for stress-related claims and updated claims-handling timelines

Cross-State Trends Employers Should Prepare for in 2026

Across California, Texas, Arizona, and Nevada, several shared themes emerged:

1. Medical Costs Are Rising Across the West: Fee schedule increases and higher outpatient utilization are driving overall claim costs upward.

2. Greater Protection for Public Safety Personnel: All four states enacted or expanded presumptions or benefits for firefighters, peace officers, or emergency responders.

3. Increased Enforcement of Administrative Compliance: Late reporting, improper notices, and outdated forms now trigger faster and more severe penalties—especially in California, Arizona, and Nevada.

4. Return-to-Work Remains One of the Most Effective Cost Controls: Stronger state policies and economic pressure reinforce the value of structured, proactive RTW programs.

How Athens Administrators Helps Employees Navigate These Changes

As a multi-state TPA with deep experience across California, Texas, Arizona, and Nevada, Athens Administrators supports organizations with:

  • State-specific claims expertise
  • Updated medical management and bill review protocol
  • Regulatory monitoring and compliance support
  • Tailored RTW and transitional duty planning
  • Data-driven stewardship reporting

If you’d like a customized review of how these 2025 developments may impact your 2026 workers’ compensation strategy, we’re here to help.

Footnotes / Sources

California Updates
California Department of Insurance: Pure premium rate decision, 2025.
WCIRB of California: 2025 Regulatory & Legislative Summaries; Medical & Pharmacy Fee Schedule Updates; Presumption expansions.
California Division of Workers’ Compensation: OMFS & Pharmaceutical Schedule updates (2025).
California Legislature: SB 779, SB 230, AB 1125, AB 1336, AB 1293, AB 799.

Texas Updates
Texas Department of Insurance (TDI): Approval of 2025 NCCI loss-cost filing; Classification table updates; Remote hearing legislation.
89th Texas Legislature: HB 2488, HB 4144, HB 4464; SB 1455 (effective 2026); SB 264; SB 2077.

Arizona Updates
Industrial Commission of Arizona: 2025 Medical Fee Schedule Update; Employer compliance bulletins; Safety & prevention guidance.

Nevada Updates
Nevada Division of Industrial Relations – SB 317 FAQ (2025). WCS.FAQs.SB317.11.12.25
Nevada Division of Industrial Relations – SB 376 FAQ (2025). WCS.FAQs.SB376.10.24.25