The California Department of Insurance has enacted new regulations to enforce access to mental health and substance use treatment under the Mental Health Parity Act (SB 855)
On July 16, California Department of Insurance Commissioner Ricardo Lara announced new regulations to hold private insurers accountable for covering mental health and substance use treatment. These regulations enforce Senate Bill 855, a landmark parity law sponsored by the Steinberg Institute and The Kennedy Forum.
The regulations also require private insurance plans to cover behavioral health crisis services under the 988 crisis hotline, as outlined in Assembly Bill 988.
“SB 855 was a landmark step forward in requiring insurers to treat mental health and substance use disorders on par with physical health conditions. But without strong enforcement, even the best laws can fall short. These new regulations are essential to realizing the promise of parity.”
Tara Gamboa-Eastman, Director of Government Affairs, Steinberg Institute
What the new mental health parity regulations do:
- Outline what must be covered under mental health and substance use benefits, including basic services, intermediate care, behavioral health crisis services, and, if applicable, outpatient prescription drugs.
- Ensure the use of current clinical standards in reviewing care decisions, reducing delays and variation in treatment approvals.
- Require coverage of out-of-network care when no in-network provider is available within a reasonable distance or timeframe.
- Set clear qualifications for claim reviewers, such as requiring board-certified addiction specialists for substance use determinations.
- Integrate crisis services under AB 988 — including mobile crisis teams and stabilization centers — into parity coverage requirements.
- Promote proactive compliance by insurers to improve access and reduce barriers to medically necessary care.
- Strengthen enforcement tools and penalties to deter noncompliance and protect patient rights.
- Establish a formal complaint process for patients to report care denials and parity violations.
As sponsors of SB 855 and AB 988, we’re proud to see this progress. These regulations are a major step forward in ensuring Californians get the care they need without delays, denials, or discrimination.
We’re grateful for Commissioner Ricardo Lara’s leadership in bringing together advocates, experts, and stakeholders to turn strong policy into meaningful impact.
Read the California Department of Insurance’s full announcement here.
Learn more about SB 855 here.