With the new year underway, it’s the perfect time for employers to brush up on five key updates shaping employee health insurance in California and across the country. Here’s what you need to know!

California Health Insurance Requirements

1: Minimum Essential Coverage Required by ACA

The Affordable Care Act (ACA) requires employer-sponsored plans include 10 Essential Health Benefits (EHBs), including coverage for:

• Ambulatory patient services (outpatient care you get without hospital admission)
• Emergency services
• Hospitalization (like surgery and overnight stays)
• Pregnancy, maternity, and newborn care(both before and after birth)
• Mental health and substance use disorder services (These include behavioral health treatment (including counseling and psychotherapy)
• Prescription drugs
• Rehabilitative and habilitative services and devices (These help people with injuries, disabilities, or chronic conditions gain or recover their mental and physical skills)
• Laboratory services
• Preventive and wellness servicesand chronic disease management
• Pediatric services, including oral and vision care (Adult Dental and Vision coverage are not considered essential health benefits under the ACA, although states may elect to require them.)

Plans must also include birth control and breastfeeding coverage in addition to any state-mandated benefits, which can vary.

2: Easier Access to Mental Health and Substance Use Disorder Benefits

The ACA mandates mental health and benefits for substance use disorders have the same or less restrictive limits as medical benefits. That means they should have like deductibles, copayments, coinsurance, and out-of-pocket coverage limits. Coverage should have also similar limits on covered visits or days.

3: California Law Limits Future Health Cost Increases

California has its first cap on health insurance costs – limiting increases to 3% by 2029. The measure says California hospitals, doctors, and insurers cannot increase spending by more than 3.5% in 2025. There’s a further reduction to 3% by 2029. If costs exceed these percentages, fines could follow. Between 2015 and 2020, Californians’ spending increased about 5.4% annually.

4: Expanded Access to In Vitro Fertilization in California

Starting July 2025, a new California law will protect residents using in vitro fertilization (IVF) to have a baby. It requires Large Group health plans to include coverage for the diagnosis and treatment of fertility. For those insured by the California Public Employees’ Retirement System (CALPERS), the law is effective in July 2027. The IVF regulation will impact about nine million Californians. It is not applicable to coverage offered by religious employers.

IVF aids couples struggling to conceive. Treatments can cost thousands of dollars. That makes pregnancy unattainable for some, while creating significant debt for others.

The legislation follows four prior efforts that stalled in Sacramento in recent years. IVF re-emerged in 2024 as a controversial issue after efforts elsewhere in the country to limit treatment access.

5: Preventive Care and Telehealth Continue in 2025

Most private health insurance plans and Medi-Cal in California are required to include coverage for preventive health services and wellness checks. They must be at no cost to the patient. Services include blood pressure, cholesterol, diabetes, and cancer screenings, among others. Vaccinations for the flu, pneumonia, tetanus, HPV, measles, COVID-19, and hepatitis A and B must be covered, too.

Counseling for smoking cessation, losing weight, better eating, treating depression, and reducing the use of alcohol must be available as well.

Under a year-end measure, Congress has temporarily extended telehealth benefits through the first quarter of 2025. Provisions of the short-term extension include:

• Remove geographic requirements for telehealth services;
• Expand practitioners eligible to provide telehealth services;
• Extend telehealth services to include Federally Qualified Health Centers and Rural Health Clinics;
• Delay in-person requirements under Medicare for mental health service delivered through telehealth and telecommunications technology;
• Allow for audio-only telehealth services; and
• Extended the use of telehealth for face-to-face encounters prior to recertification.

More Questions? Consult a Broker

If you still have questions about what’s new for 2025, reach out to your employee benefits broker or insurance agent to get more information. A broker can provide valuable insights on health insurance changes in the new year. If you don’t have a broker, search for one online at MyCalChoice.com.