DHCS is committed to advancing health equity and improving the well-being of all Medi-Cal members. Community reinvestment supports these goals by requiring Medi-Cal managed care plans (MCP) to reinvest a portion of their annual net income into the local communities they serve. These investments address unmet health-related social needs and strengthen community well-being by supporting programs focused on housing, improved public spaces, workforce development, food security, and other locally identified priorities. This reinvestment is a core component of CalAIM’s statewide transformation, ensuring health plan profits strengthen local infrastructure and support the social drivers of health that shape member outcomes.

Community reinvestment is a requirement of the 2024 Medi‑Cal MCP contract, which directs each MCP to reinvest a portion of its annual net income into locally identified community priorities. The policy is guided by DHCS requirements outlined in All Plan Letter (APL) 25-004. In 2026, MCPs across California are collectively committing $186 million in community reinvestment funds, which must be fully expended by the end of 2029. More information on obligation amounts is available in the Community Reinvestment Obligation section.

Why Community Reinvestment Matters

Community reinvestment ensures that resources are directed to where they are most needed. By reinvesting funds locally, MCPs and qualifying subcontractors help expand programs that improve health, reduce inequities, and build stronger, healthier communities. These investments create lasting benefits for Medi-Cal members and support long-term community vitality.

How Community Reinvestment Works 

• Investment Cycle: Community reinvestment operates on a three-year investment cycle aligned with each county’s Community Health Assessment (CHA), which identifies key health needs and priorities. MCPs must spend each year’s obligation during the cycle, with the first running from 2026–2029.
• Annual Obligation Amounts: By the second quarter of each year, DHCS calculates and notifies MCPs of their annual community reinvestment obligation, based on the plan’s net income from two years prior. For example, the 2026 Community Reinvestment Plan is based on calendar year (CY) 2024 net income.
• Obligations include:
  • Base obligation: The minimum level of net income that an MCP or qualifying subcontractor with positive net income is required to invest into initiatives that serve the communities in which the MCP operates.
  • Quality Achievement obligation: The additional net income that MCPs are required to invest into initiatives in counties where the MCP operates and does not meet minimum quality measure performance thresholds. Detailed calculation methodology is provided in APL 25‑004.
  • Annual Community Reinvestment Plan: MCPs must engage in a collaborative planning process with Local Health Jurisdictions (LHJ), Community Advisory Committees, and other MCPs operating in the same jurisdictions to ensure alignment with community needs. Each September, MCPs must submit a Community Reinvestment Plan outlining how funds will be used and demonstrating compliance with APL 25‑004. After DHCS approval, MCPs must post the document to their website within 30 days.
  • Community Reinvestment Implementation: After DHCS approves an MCP’s Community Reinvestment Plan, the MCP and any qualifying subcontractors must begin implementing approved investment activities.
  • Community Reinvestment Report: At the end of each investment cycle, MCPs must submit a community reinvestment report documenting outcomes. After DHCS approval, the report must be posted on the MCP’s website.

For more information about specific requirements, please refer to APL 25-004. 

Timeline of MCP Community Reinvestment Activities for Initial Investment Periods 

(ADA) Alt text: Timeline graphic from CY 2026 to CY 2033 showing Community Reinvestment Plan dates starting with Community Reinvestment Plan #1 in 2026. Key years CY 2027, CY 2029, CY 2031, and CY 2032 are starred because they indicate when Community Health Assessments or Community Health Improvement Plans are due.

Policy Documents 

• All Plan Letter (APL) 25-004 
  • Appendix A 
  • Appendix B: Community Reinvestment Plan 
    • Instructions 
    • EXHIBIT 1: Attestation of Support from Public Health Director Template 
    • EXHIBIT 2: Attestation of Support from Behavioral Health Director Template 
    • EXHIBIT 4: Community Reinvestment Plan Template 
    • EXHIBIT 5: Proposed Allocation of Funds Template 
  • Appendix C 
  • Appendix D: Community Reinvestment Report 
    • Instructions 
    • Community Reinvestment Report Template 
• Info Notice 26.002

Community Reinvestment Obligations 

DHCS will calculate community reinvestment funding obligations for MCPs and any qualifying subcontractors each year. Plans will receive their preliminary obligation amounts in the second quarter, with final amounts updated in the third quarter following the submission of Medical Loss Ratio (MLR) reports.

All community reinvestment obligations will be posted annually. Please check back in June 2026 for the report reflecting CY 2024 net income.

Resources 

• The Community Reinvestment Frequently Asked Questions (FAQs) address common questions and provide additional guidance and clarification to support MCPs in implementing Community Reinvestment requirements. 

• Webinar – The Fierce Urgency for Community Partnerships 

Questions and Comments 

Contact DHCS with any questions or comments: 

• Community reinvestment policy at PHMSection@dhcs.ca.gov. 

• Community Reinvestment Plan submission information at ReInvest360@dhcs.ca.gov.