SB 855 — California's Mental Health and Substance Use Disorder Parity Law

What SB 855 Changed

SB 855 amended California's existing mental health parity act, which had centered on severe mental illnesses and serious emotional disturbances of children. It now requires coverage of medically necessary treatment for any mental health or substance use disorder diagnosis in the most recent editions of the DSM and ICD (California Health Benefits Review Program). Insurers must apply the same standards of care followed by addiction and mental health care providers (California Department of Insurance), and under regulations announced in 2025 they must use clinical practice guidelines from nonprofit specialty associations.

The Three Key Provisions for Inpatient Rehab Callers

According to the California Department of Insurance: (1) Medically necessary care must be covered, including intensive outpatient treatment, residential treatment, and hospital stays, and the length of covered care cannot be subject to arbitrary limits. (2) Insurers cannot limit coverage to treating only the acute symptoms of a condition — the underlying condition must be treated. (3) If a network provider or facility within a reasonable distance can't provide care in a timely manner, the insurer must arrange out-of-network care at the same out-of-pocket cost as in-network care. The Department of Insurance and the Department of Managed Health Care oversee compliance for the plans they regulate.

The 2025 Enforcement Regulations

On July 17, 2025, the California Department of Insurance announced regulations enforcing the Mental Health Parity Act following SB 855. Key provisions: for substance use disorder benefits, a reviewer who makes an adverse benefit determination must be an actively practicing board-certified addiction specialist physician. Coverage for behavioral health crisis services under AB 988, including mobile crisis teams and crisis stabilization, is integrated with SB 855's requirements. The regulations also create a formal complaint process so the Department can investigate denials.

How to Appeal an SB 855-Covered Denial

Step 1: File an internal appeal with the insurer — you must do so within 180 days (6 months) of receiving notice that your claim was denied (HealthCare.gov). Step 2: If the internal appeal fails, request an external Independent Medical Review (IMR) through the California Department of Managed Health Care (for DMHC-regulated plans) or the Department of Insurance (for CDI-regulated policies). Step 3: File a complaint with CDI at 1-800-927-4357 or online at insurance.ca.gov. If your denial was reviewed by someone other than a board-certified addiction specialist physician, mention that in your appeal or complaint.

What SB 855 Does NOT Do

SB 855 applies to commercial plans regulated in California by DMHC or CDI. Enrollees in self-insured (self-funded) employer products are not subject to it (California Health Benefits Review Program). Many large employers self-fund their plans, so check your plan documents or ask HR — or a placement advisor can tell you which kind you have in one call. Some other plan types are also governed separately.

Last reviewed: October 29, 2026