As others said, you do it when you anticipate not needing to heal life-threatening damage for several seconds. Setting this up through application of shields, HoTs, and/or stuns can help extend your DPS uptime.

Once you get the hang of it, your mental flowchart wil kick in, and you'll find yourself automatically toggling on CS whenever you know you can get away with it. As SCH, CS is like a default stance to which I revert whenever direct heals are unnecessary. Always Be Casting unless your MP situation has become desperate (i.e. virtually never unless you had to spam rez for some reason).

Even on AST I follow the same protocol except that I spend more GCDs actively healing. Essential Dignity gives me an ace in the hole when it's up so that I can push extra DPS and still get caught up on tank healing quickly and without excessive MP consumption.