§ 10144.5. — 10144.5. (Amended by Stats. 2025, Ch. 413, Sec. 7.)

(a)
(1)
Every disability insurance policy issued, amended, or renewed on or after January 1, 2021, that provides hospital, medical, or surgical coverage shall provide coverage for medically necessary treatment of mental health and substance use disorders, under the same terms and conditions applied to other medical conditions as specified in subdivision (c).
(2)
For purposes of this section, “mental health and substance use disorders” means a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the World Health Organization’s
International Statistical Classification of Diseases and Related Health Problems, or that is listed in the most recent version of the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders. Changes in terminology, organization, or classification of mental health and substance use disorders in future versions of the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders or the World Health Organization’s International Statistical Classification of Diseases and Related Health Problems shall not affect the conditions covered by this section as long as a condition is commonly understood to be a mental health or substance use disorder by health care providers practicing in relevant clinical specialties.
(3)
(A)
For purposes of this section, “medically
necessary treatment of a mental health or substance use disorder” means a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of an illness, injury, condition, or its symptoms, in a manner that is all of the following:
(i)
In accordance with the generally accepted standards of mental health and substance use disorder care.
(ii)
Clinically appropriate in terms of type, frequency, extent, site, and duration.
(iii)
Not primarily for the economic benefit of the disability insurer and insureds or for the convenience of the patient, treating physician, or other health
care provider.
(B)
This paragraph does not limit in any way the independent medical review rights of an insured or policyholder under this chapter.
(4)
“Health care provider” means any of the following:
(A)
A person who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code.
(B)
An associate marriage and family therapist or marriage and family therapist trainee functioning pursuant to Section 4980.43.3 of the Business and Professions Code.
(C)
A qualified autism service provider certified by a national entity as defined in Section 4999.200 of the Business and Professions
Code or a qualified autism service professional as defined in Section 4999.201 of the Business and Professions Code.
(D)
An associate clinical social worker functioning pursuant to Section 4996.23.2 of the Business and Professions Code.
(E)
An associate professional clinical counselor or professional clinical counselor trainee functioning pursuant to Section 4999.46.3 of the Business and Professions Code.
(F)
A registered psychologist, as described in Section 2909.5 of the Business and Professions Code.
(G)
A registered psychological assistant, as described in Section 2913 of the Business and Professions Code.
(H)
A
psychology trainee or person supervised as set forth in Section 2910 or 2911 of, or subdivision (d) of Section 2914 of, the Business and Professions Code.
(5)
For purposes of this section, “generally accepted standards of mental health and substance use disorder care” has the same meaning as defined in paragraph (1) of subdivision (f) of Section 10144.52.
(6)
A disability insurer shall not limit benefits or coverage for mental health and substance use disorders to short-term or acute treatment.
(7)
All medical necessity determinations made by the disability insurer concerning service intensity, level of care placement, continued stay, and transfer or discharge of insureds diagnosed with mental health and substance
use disorders shall be conducted in accordance with the requirements of Section 10144.52.
(8)
A disability insurer that authorizes a specific type of treatment by a provider pursuant to this section shall not rescind or modify the authorization after the provider renders the health care service in good faith and pursuant to this authorization for any reason, including, but not limited to, the insurer’s subsequent rescission, cancellation, or modification of the insured’s or policyholder’s contract, or the insurer’s subsequent determination that it did not make an accurate determination of the insured’s or policyholder’s eligibility. This section shall not be construed to expand or alter the benefits available to the insured or policyholder under an insurance policy.
(b)
The
benefits that shall be covered pursuant to this section shall include, but not be limited to, the following:
(1)
Basic health care services, as defined in subdivision (b) of Section 1345 of the Health and Safety Code.
(2)
Intermediate services, including the full range of levels of care, including, but not limited to, residential treatment, partial hospitalization, and intensive outpatient treatment.
(3)
Prescription drugs, if the policy includes coverage for prescription drugs.
(c)
The terms and conditions applied to the benefits required by this section, that shall be applied equally to all benefits under the disability insurance policy shall include, but not be
limited to, all of the following patient financial responsibilities:
(1)
Maximum and annual lifetime benefits, if not prohibited by applicable law.
(2)
Copayments and coinsurance.
(3)
Individual and family deductibles.
(4)
Out-of-pocket maximums.
(d)
If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards set by law or regulation, the disability insurer shall arrange coverage to ensure the delivery of medically necessary out-of-network services and any medically necessary
followup services that, to the maximum extent possible, meet those geographic and timely access standards. As used in this subdivision, to “arrange coverage to ensure the delivery of medically necessary out-of-network services” includes, but is not limited to, providing services to secure medically necessary out-of-network options that are available to the insured within geographic and timely access standards. The insured shall pay no more than the same cost sharing that the insured would pay for the same covered services received from an in-network provider.
(e)
This section shall not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies.
(f)
(1)
For the purpose of compliance with this section,
a disability insurer may provide coverage for all or part of the mental health and substance use disorder services required by this section through a separate specialized health insurance policy or mental health policy. This paragraph shall not apply to policies that are subject to Section 10112.27.
(2)
A disability insurer shall provide the mental health and substance use disorder coverage required by this section in its entire service area and in emergency situations as may be required by applicable laws and regulations.  For purposes of this section, disability insurance policies that provide benefits to insureds through preferred provider contracting arrangements are not precluded from requiring insureds who reside or work in geographic areas served by specialized health insurance policies or mental health insurance policies to
secure all or part of their mental health services within those geographic areas served by specialized health insurance policies or mental health insurance policies, provided that all appropriate mental health or substance use disorder services are actually available within those geographic service areas within timeliness standards.
(3)
Notwithstanding any other law, in the provision of benefits required by this section, a disability insurer may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing, provided that these practices are consistent with Section 10144.4 of this code, and Section 2052 of the Business and Professions Code.
(g)
This section shall not be construed to deny or restrict in any way
the department’s authority to ensure a disability insurer’s compliance with this code.
(h)
A disability insurer shall not limit benefits or coverage for medically necessary services on the basis that those services should be or could be covered by a public entitlement program, including, but not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Insurance, and shall not include or enforce a contract term that excludes otherwise covered benefits on the basis that those services should be or could be covered by a public entitlement program.
(i)
A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine,
alter, or conflict with the requirements of this section.
(j)
If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation.

Legislative History

Amended by Stats. 2025, Ch. 413, Sec. 7. (SB 402) Effective January 1, 2026.