Across the country, the integration of artificial intelligence (AI) into everyday life—both in our private lives and across corporate sectors—has accelerated rapidly. In response, state legislatures have introduced a growing body of bills aimed at regulating the multifaceted applications of AI. These legislative efforts cover a variety of key areas such as healthcare, employment, criminal and civil law, housing, and the overall protection of consumers. The bills which were introduced during the beginning of the legislative session reflect a nationwide recognition of AI’s broad societal impact.
Healthcare
Connecticut has addressed AI use in healthcare with HB05590, where the proposed bill would prohibit health insurers from using AI to deny health insurance claims.[i] Likewise, the Illinois legislature has introduced the Artificial Intelligence Systems Use in Health Insurance Act, HB5918.[ii] This Act would permit the Department of Insurance in Illinois to oversee how health insurance companies use of AI systems may lead to adverse consumer outcomes such as denial, reduction, or termination of coverage. The Department would have the authority to investigate the development, use, and governance of such AI systems. The most important aspect of this Bill would be that health insurance issuers are prohibited from issuing adverse decisions based solely on AI without human review. Namely, all decisions by health insurance issuers would be required to be meaningfully reviewed by a person with the authority to override the AI system.
Similarly, the Indiana legislature proposed an amendment to the Indiana Code, HB1620, concerning health, which would require the disclosure of artificial intelligence use in health care.[iii] Notably, the amendment would require the disclosure to patients when the health care provider uses AI to make or inform any decision involved in the provision of health care to the patient. In addition, the amendment would require a health insurer to disclose their use of AI to make or inform any decision involved in the provision of the coverage to the insured.
Tennessee’s legislature proposes, with SB1261, that health insurers using AI for utilization reviews ensure decisions are based on individual clinical data and not solely on group datasets.[iv] The bill would prohibit discrimination against an enrollee and would require regular and periodic performance reviews of their use of AI. Unlike Connecticut, Illinois, and Indiana – Tennessee’s bill would provide for a private right of action for individuals who find that a health insurance issuer violates the proposed bill. A plaintiff may receive actual damages, punitive damages, and reasonable court costs and attorneys’ fees.
Employment
As the use of artificial intelligence in employment decisions grows, states are taking steps to ensure transparency and accountability in how these technologies are applied. In line with this effort, New York has enacted new legislation aimed at increasing public awareness and oversight of automated decision-making tools used by state agencies.
On February 14, 2025, the New York legislature passed Senate Bill 822, which takes effect on July 1, 2025.[v] This bill requires any state agency which utilizes an automated employment decision-making tool to publish a list of the tools on the state agency’s website. Within the list, it must also outline the description of the tool, the date the state agency first began using the tool, and a summary of the purpose and use of the tool. If a state agency uses an artificial intelligence system, it must not alter the rights or benefits and privileges of any employee.
Criminal and Civil Law
The California legislature introduced AB316, which would prohibit defendants from claiming they are not liable for harm caused by artificial intelligence they developed or used, even if the AI acted autonomously.[vi] In addition, the California legislature intends to expand the existing civil cause of action for false impersonation of another person with SB11.[vii] Specifically, digital replication of a voice or likeness that a reasonable person would believe to be a genuine voice or likeness also creates a civil cause of action for false impersonation. This bill would require any person or entity that sells or provides access to artificial intelligence technology that is designed to create a digital replica, to provide a consumer warning that misuse of the technology may result in civil or criminal liability for the user.
With respect to the rules of evidence, the proposed New York Assembly Bill 1338 introduces new evidentiary standards for the admissibility of AI-generated or AI-processed evidence in both criminal and civil proceedings.[viii] The bill would require that such evidence may not be admitted unless it is substantially supported by independent, admissible evidence and the proponent can demonstrate the reliability and accuracy of the AI’s use through qualified expert testimony.
Housing
In states such as New York, Kentucky, Maryland, and New Hampshire, the states’ legislature have proposed to prohibit the use of pricing algorithmic tools to determine rent amount or to change the rent amount owed by a residential tenant.[ix] The definition of “algorithmic tool” is a device that uses one or more algorithms to perform calculations of data to advise a landlord on the amount of rent that the landlord may consider charging a tenant.
Protection of Consumers
Connecticut’s legislature introduced SB00002, whereby any organization deploying a high-risk AI system must exercise reasonable care to protect consumers from known or foreseeable risks of algorithmic discrimination.[x] A “high-risk AI system” is defined as any AI system which is a substantial factor in making a consequential decision. Each deployer of high-risk AI would also be required to implement and maintain a risk management policy and program that identifies, documents, and mitigates potential discrimination risks.
In a similar vein, the Georgia legislature proposed an amendment to the Official Code of Georgia to provide protections for consumer when private entities employ certain AI systems.[xi] Among the many protections the amendment would provide to consumers, it aims to guard against discrimination caused by such AI systems; and if there is a consequential decision based on an AI system, the private entity must provide a notice to consumers.
Regarding financial services and lending, New York’s proposed bill, A773 would amend the current banking law to regulate the use of automated decision tools to make lending decisions.[xii] This amendment would require banks to conduct a disparate impact analysis to assess the actual impact of any automated decision tool used by any such bank and submit a summary of the most recent disparate impact analysis of such a tool at least every year. In addition to this, any bank which uses automated decision tool must notify an applicant for a loan that the bank will be using the tool and the information which will be used by the automated decision tool.
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As artificial intelligence continues to shape our daily lives, state legislatures are moving quickly to establish guardrails that prioritize transparency, fairness, and accountability. While many of these bills are still in the proposal stage, they signal a clear intent by lawmakers to proactively address the challenges and risks posed by AI technologies. Corporations and law firms alike should monitor these developments closely and prepare to adapt to a more regulated AI landscape.
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Alaina Jraige is an attorney in Foley Mansfield’s Chicago office, where she focuses on defending clients in privacy law matters, toxic tort and mass tort litigation, particularly cases involving talc and asbestos, and general litigation matters.
[i] Connecticut H.B. 05590 (January 21, 2025); An Act Prohibiting Health Insurers From Using Artificial Intelligence To Deny Health Insurance Claims. CT HB05590 | 2025 | General Assembly | LegiScan
[ii] Illinois HB5918 (January 4, 2025), Illinois HB0035, engrossed; Artificial Intelligence Systems Use in Health Insurance Act. HB5918 103RD GENERAL ASSEMBLY
[iii] Indiana HB1620 (January 21, 2025); Disclosure of Artificial Intelligence Use in Health Care. IN HB1620 | 2025 | Regular Session | LegiScan
[iv] Tennessee SB1261 (January 6, 2025). Tennessee General Assembly Legislation
[v] New York S00822 (February 14, 2025). Bill Text: NY S00822 | 2025-2026 | General Assembly | Introduced | LegiScan
[vi] California AB316 (March 26, 2025); Artificial Intelligence: Defenses. Bill Text: CA AB316 | 2025-2026 | Regular Session | Introduced | LegiScan
[vii] California SB11 (April 10, 2025); Artificial Intelligence Technology. Bill Text: CA SB11 | 2025-2026 | Regular Session | Introduced | LegiScan
[viii] New York A01338 (January 9, 2025); Bill Title: Sets rules and procedures for the admissibility of evidence created or processed by artificial intelligence. Bill Text: NY A01338 | 2025-2026 | General Assembly | Introduced | LegiScan
[ix] New York A01417 (March 13, 2025), NY A01417 | 2025-2026 | General Assembly | LegiScan; Kentucky HB358 (February 7, 2025), KY HB358 | 2025 | Regular Session | LegiScan; Maryland HB817 (January 29, 2025, MD HB817 | 2025 | Regular Session | LegiScan; New Hampshire HB558 (March 20, 2025), Bill Text: NH HB558 | 2025 | Regular Session | Introduced | LegiScan
[x] Connecticut SB00002 (January 8, 2025). CT SB00002 | 2025 | General Assembly | LegiScan
[xi] Georgia Title 10 of the Official Code of Georgia Annotated (February 13, 2025). GA SB167 | BillTrack50
[xii] New York A773 (January 8, 2025). NY State Assembly Bill 2025-A773