Illinois Employment and Health Benefit Law Updates Taking Effect in 2026

Several important legal updates in Illinois will take effect in 2026, impacting employer-sponsored commuter programs and required health insurance benefits. Here’s a clear breakdown of what’s changing and what employers need to know.

Expanded Commuter Benefits Coverage

Beginning January 1, 2026, amendments to the Transportation Benefits Program Act (TBPA) significantly broaden eligibility requirements.

Previously, the TBPA applied only to employers with 50 or more full-time employees in designated Illinois regions, and eligibility was limited to employees working at least 35 hours per week. Under the revised law:

  • Part-time employees are now included, both for determining employer coverage and for participation in commuter benefit programs.

  • Employees (excluding certain unionized construction workers) become eligible for pre-tax commuter benefits after 120 days of employment.

  • The law continues to apply within areas governed by the Regional Transportation Authority (RTA).

This change means employers must reassess workforce counts and extend benefits access beyond full-time staff.

Updates to the Illinois Insurance Code

New mandated health benefits will apply to policies issued or renewed in 2026. These requirements generally affect fully insured health plans issued in Illinois. Plans issued out of state and self-funded ERISA plans remain exempt, except where noted.

Key updates include:

  • Menopause Treatment Coverage
    Insurance must now cover hormone therapies for menopausal symptoms when deemed medically necessary, not just those tied to hysterectomy procedures.

  • Wigs and Scalp Prosthetics
    Plans must cover one wig or scalp prosthesis every 12 months for individuals experiencing hair loss due to conditions like alopecia or cancer treatments.

  • Temporary Brand-Name Drug Substitution
    Coverage is required for brand-name medications when generics are unavailable due to supply shortages, provided dosage adjustments are not feasible.

  • Inhaler Cost Caps
    Out-of-pocket costs for covered inhalers are capped at $25 for a 30-day supply, with a maximum of $50 within a 30-day period, and cannot be subject to deductibles.

  • Expanded Colonoscopy Coverage
    Medically necessary colonoscopies must be covered without cost-sharing, including diagnostic procedures recommended due to symptoms or existing conditions (with limited exceptions for high-deductible plans tied to HSA eligibility).

  • MBI and MRI Coverage Requirements
    Coverage for molecular breast imaging (MBI) and MRI scans must be provided when medically necessary, regardless of gender. This requirement also extends to self-funded health plans sponsored by Illinois state and local government entities, including public schools.

Employer Action

  • Review commuter benefit policies to ensure part-time employees are included and properly counted toward eligibility thresholds.

  • Coordinate with insurance carriers to understand how plan designs have been updated and communicate any changes to employees.

  • Government and public-sector employers with self-funded plans should work closely with TPAs and stop-loss providers to ensure compliance and update plan documents as needed.

Mark C