"In many states, regulations and practices regarding LLCs ARE still being worked out." My understanding is that the regulations and practices are not yet finalised. People are still trying to decide on what the regulations and practices should be.

Su.ki is right about the ARE correction, watch your subject-verb agreements. You had a plural subject, so the verb must be plural too. To answer your question, äre worked out means in progress. They started it, but did not finish it yet. Also, to give you some context, whenever you hear anything about the government (ie. states and regulations) and the phase "being worked out" in the same sentence, there is an expression "don't hold your breath." Which means it can take a very long to complete, if it gets done at all. -US English