Friday, December 5, 2025
DMHC fines Modern Health California $2 million for operating as a health plan without a license
SACRAMENTO - The Department of Managed Health Care (DMHC) took enforcement action against Modern Health California, P.C. (MHPC), including a $2 million fine for operating as a specialized health plan in California without a license. MHPC agreed to a settlement including paying the penalty and ceasing operations as an unlicensed plan. MHPC’s affiliate, Modern Life CA, Inc. (MLCA), has become licensed to legally operate in the state.
“Health plans must be licensed in California to ensure health plan members are protected,” said DMHC Director Mary Watanabe. “Members of licensed health plans have rights under the law, including the right to file a complaint and appeal to the DMHC. Modern Health California has agreed to stop operating as an unlicensed plan and transfer current subscribers to a licensed plan.”
BACKGROUND: The DMHC found MHPC was illegally operating as an Employee Assistance Program (EAP) in California without a health plan license. MHPC contracted with employers to offer short-term mental health services to an estimated 140,000 employees.
Under this enforcement action, MHPC will cease operations as an unlicensed plan and transfer all of its current subscribers to a licensed plan, MLCA. This ensures members will have access to the strong consumer protections provided under California law. MHPC is required to notify its subscribers 30 days in advance of this transfer.
WHAT MEMBERS NEED TO KNOW: Health plan members enrolled in licensed health plans have rights, including the right to file a complaint and appeal to the DMHC. The DMHC encourages health plan members having trouble getting the care they need to first file a complaint, sometimes called a grievance or appeal, with their health plan. If the member does not agree with their health plan's response or the plan takes more than 30 days to address the problem in non-urgent cases, the DMHC Help Center can work with the member and health plan to resolve the issue. If a health plan member is experiencing an urgent issue, they can contact the DMHC Help Center immediately at www.DMHC.ca.gov or 1-888-466-2219.
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About DMHC
The mission of the DMHC is to ensure health plan members have access to equitable, high-quality, timely, and affordable health care within a stable health care delivery system. The DMHC accomplishes this important mission by regulating health plans, enforcing California’s strong consumer protection laws and assisting health plan members. For more information visit www.DMHC.ca.gov.