2024 State Legislative Session Takeaways: Iowa

Written by Mark Salters

The Iowa General Assembly adjourned on April 20. The legislature convenes on the second Monday of January each year and typically adjourns 100 days later when per diem expenses end. 4,943 pieces of legislation were introduced while 307 were enacted. 

Here is what you may have missed:

The Budget

In the final days of session, lawmakers approved $8.9 billion in state spending for the upcoming year. The budget allocates nearly $1 billion for the Iowa Department of Education. The legislation requires school districts to adopt rules related to chronic absenteeism and truancy by setting up absenteeism prevention plans. The General Assembly also approved a combined $2.2 billion budget for the Department of Health and Human Services and Department of Veterans Affairs. The budget provides additional funding for reimbursement rates, including $2.1 million to raise Medicaid reimbursement rates for mental health care and $3 million of adjustments to home health provider rates for older Iowans.

Tax Cuts and Economic Development

Since 2018, Governor Kim Reynolds (R) has proposed measures to reduce the state’s personal income tax. This year, the General Assembly passed SF 2442 and reduced the income tax rate to a flat 3.8%. It is estimated that the tax cut will save Iowans more than $23.5 billion over a decade. Reynolds also signed legislation that established the Major Economic Growth Attraction Program. This program allows businesses that invest over $1 billion in a project to receive an investment of up to 5% of their qualifying investment. The tax credit cannot be claimed until after the project has been placed in service and at least 50% of the project jobs specified in the contract have been created.

Healthcare and Pharmaceuticals

Iowa passed new legislation requiring health insurance plans to cover biomarker testing and imposing new obligations on pharmacy benefit managers. HF 2099 expands a PBM’s good faith and fair dealing duty to pharmacies. The new law also bans PBMs from retaliating against pharmacies based on their exercise of any right or remedy under law including terminating or refusing to renew a contract with pharmacies, subjecting pharmacies to increased audits, or withholding or failing to promptly pay any money the PBM owes pharmacies.

Additionally, HF 2668, which awaits Governor Reynolds’ signature, requires a health insurance contract to offer coverage for biomarker testing for diagnosing, treating, managing, or monitoring a disease when the test has a demonstrated clinical utility. This new law would apply to third-party provider contracts, policies, or plans delivered on or after January 1, 2025.

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