NEW YEAR, NEW LAWS

2026, HERE WE COME

More than 900 new state laws take effect today

California lawmakers passed more than 900 new laws in 2025, with many taking effect in 2026, impacting areas like insulin costs ($35 cap), landlord responsibilities (stoves/fridges), car buyer rights (three-day returns), and employment rules.

California State Rule Changes— Highlights Medi-Cal Asset Limits Reinstated:

California will reinstate asset limits for non-expansion Medi-Cal programs, which cover many older adults and people with disabilities. The new limits are $130,000 for an individual and an additional $65,000 for each extra household member. Those over the new limit may have their coverage terminated, and new applicants must meet this limit to qualify.

Medi-Cal Benefit Cuts: Coverage for certain optional pharmacy benefits, such as some anti-obesity medications (GLP-1 agonists for weight loss) and certain over-the-counter drugs, will end.

Landlord Laws: Landlords will be required to provide working stoves and refrigerators in rental units under AB 628. AB 246 protects tenants from eviction if delays in Social Security benefits affect their rent payments.

Minimum Wage Increase: The statewide minimum wage will increase to $16.90 per hour for all employers. The minimum annual salary threshold for most exempt employees will also rise to $70,304.

“Stay-or-Pay” Contracts Banned:

Most agreements that require employees to repay training costs or other expenses if they leave a job before a certain date will be unlawful for contracts entered into on or after Jan. 1, 2026.

“Know Your Rights” Notice: By Feb. 1, 2026, employers must provide a standalone written notice to all employees detailing their rights, including workers’ compensation, immigration inspection notices, and union organizing rights.

Expanded Pay Data Reporting and Equal Pay: The definition of “wages” for equal pay purposes is expanded to include all forms of compensation (bonuses, stock options, etc.). Starting in 2026, penalties will be imposed for failing to file required pay data reports become mandatory upon request by the Civil Rights Department.

Crime Victim Leave Expansion:

Employees who are victims of certain crimes, or whose family members are victims, can use paid sick leave and unpaid leave to attend judicial proceedings related to the crime.

Single-Use Plastic Bag Ban: The exemption for thicker, reusable plastic grocery bags is removed. Stores can only provide recycled paper bags (for a minimum 10-cent fee). used car from a California dealer will have a three-day window to return a used car for a refund.

Insulin Cost Cap: Large health insurers regulated by the state are required to cap insulin copays at $35 for a 30day supply.

Cat Declawing Prohibited:

The declawing of cats is now banned, as the practice is widely considered inhumane.

Law Enforcement Mask Ban: Federal and local law enforcement officers operating in California will be prohibited from wearing masks to conceal their identity while on duty (with some exceptions).

Expanded Behavioral Health Treatment: The definition of “gravely disabled” for involuntary behavioral health treatment is expanded to include individuals who cannot keep themselves safe or secure necessary medical care.

Extended Sexual Assault Statute of Limitations: A twoyear window (Jan. 1, 2026 - Dec. 31, 2027) will open to revive civil claims for sexual assault that were previously time-barred, specifically if a cover-up by an entity is alleged.

Public School Phone Policies: All public K-12 schools must implement policies that limit or prohibit student phone use by July 1, 2026.

AI Regulation: The Transparency in Frontier Artificial Intelligence Act (SB 53) will impose safety and reporting requirements on developers of large “frontier” AI models, with whistleblower protections for employees who report risks.

Gender-Neutral Restrooms in Schools: All California public schools must have at least one gender-neutral restroom by July 1, 2026.

For more information on new state laws, visit the Governor’s Office at https://www. ca.gov, which often posts summaries of signed bills and CalMatters at calmatters.org/ politics/2024/12/california-newlaws- 2025/, which provides detailed breakdowns of new laws.

Federal Rule Changes— Highlights

The Social Security Costof- Living Adjustment (COLA):

The COLA will increase by 2.8% in 2026. For individuals under full retirement age all year in 2026, the earnings limit is $24,480; $1 is deducted from benefits for every $2 earned over this limit.

For individuals reaching full retirement age in 2026, the limit is $65,160; $1 is deducted for every $3 earned over this limit until the month they reach full retirement age.

For those already at or over full retirement age, there are no earnings limits, and they can keep all their benefits regardless of how much they earn.

Medicare Advantage and Part D: New rules aim to hold Medicare Advantage and Part D plans more accountable, clarify prior authorization requirements, and expand access to certain medications.

Tax Deduction: The federal One Big Beautiful Bill Act introduces a new deduction for seniors aged 65 and older, allowing an additional $6,000 deduction per eligible individual, with income phase-out rules.

Health Insurance Premiums: Enhanced Premium Tax Credits are set to expire at the end of 2025.

This may cause significant premium increases for many enrollees starting Jan. 1, unless Congress acts to extend them.

There is no single clearinghouse of federal rule changes but people can get specific information at official government websites such as govInfo.gov and congress.gov, which provide information on laws, regulations, and public records from all three branches of government.