Colorado Governor Jared Polis signed two health-care artificial intelligence bills into law this week, adding the state to a growing roster of jurisdictions that have moved to regulate algorithmic decision-making in insurance coverage and mental health care delivery.

HB 26-1139: AI Coverage Denials

House Bill 26-1139 prohibits health insurers operating in Colorado from issuing prior-authorization denials based solely on the output of an automated algorithm or artificial intelligence system. Any AI-assisted denial must be reviewed and affirmed by a licensed clinician, and the insurer must document the clinical basis for the determination and provide the treating clinician an opportunity to submit additional information before a final decision is issued.

Colorado joins a growing roster of states with analogous provisions. California’s SB 1120, effective January 1, 2025, was the first such law to take effect; Arizona, Maryland, Texas, Connecticut, and Nebraska have since enacted similar requirements. A parallel rule under development at the Centers for Medicare & Medicaid Services would apply an equivalent requirement to Medicare Advantage plans nationally, though that rule has not been finalized.

HB 26-1195: AI Psychotherapy

House Bill 26-1195 requires that any AI-generated psychotherapy — including chatbot-delivered cognitive behavioral therapy, mental health coaching applications, and related interventions — operating in Colorado must disclose the AI nature of the service to users and operate under the supervision of a licensed mental health professional who reviews clinical decisions at a minimum frequency set by the Colorado Department of Regulatory Agencies.

The law carves out pure self-help tools and platforms used solely for screening or psychoeducation. It does not prohibit AI-assisted therapy — only unsupervised AI performing therapeutic functions.

Illinois enacted the broadly similar Wellbeing of People Receiving AI-Assisted Therapy (WOPR) Act (House Bill 1806, signed August 4, 2025) before Colorado, making Illinois the first state with this specific supervision requirement. Nevada’s Assembly Bill 406 on AI mental health tools also preceded the Colorado measure.

Distinct from Colorado’s Broader AI Act

Both bills are narrowly targeted at health-care applications and are distinct from Colorado’s Senate Bill 205 (2024), the broader consumer-protection AI law that established risk-based requirements for high-stakes AI systems generally. The new health-care bills add sector-specific requirements on top of — not instead of — that general-purpose framework.

Colorado HB 26-1139 and HB 26-1195, signed 2026. Cal. SB 1120 (eff. Jan. 1, 2025). Ill. HB 1806 (WOPR Act, signed Aug. 4, 2025). Nev. AB 406.