AB 594: Student health insurance.

Existing law, for policy years beginning on or after January 1, 2024, requires student health insurance coverage, as defined, to be considered individual health insurance coverage. Existing law, except as specified, requires a blanket disability insurance policy that meets the definition of student health insurance coverage to comply with insurance provisions that are applicable to nongrandfathered individual health insurance, including, among others, essential health benefits requirements and annual limits on out-of-pocket expenses. Existing law exempts student health insurance coverage from certain requirements otherwise applicable to health insurers and health benefit plans, including the establishment of specified enrollment periods, guaranteed availability and renewability, specified coverage level requirements, and single risk pool rating requirements. Existing law requires a notice to be provided in the student health insurance enrollment materials stating that California requires residents and their dependents to obtain and maintain health coverage, either through student health insurance, or through a different method, including Medi-Cal, Covered California, or, if under 26 years of age, their parents coverage.

This bill would, commencing July 1, 2026, authorize a student certificate holder to request to terminate their student health insurance coverage during the policy year if the student graduates, takes a leave of absence, or is no longer enrolled at the institution of higher education. The bill would require the request to be provided to the institution of higher education at least 30 days before the effective date of termination and would, upon receipt of the request to terminate coverage, require the institution to terminate coverage effective within the same calendar month if feasible, but no later than the last day of the calendar month in which the 30-day period ends. The bill would authorize the student to pay only the premium through the date of the termination, as specified. The bill would require a student or dependent of a student to be notified of premium liability to them, if any, if they choose not to terminate coverage pursuant to these provisions. The bill would, commencing July 1, 2026, if a student requests a waiver from student health insurance coverage, require the waiver to be granted if the student obtains or maintains health coverage that is minimum essential coverage, as specified. The bill would prohibit charging the student a fee or premium if the waiver is granted.

Existing law requires a health insurer to file with the Department of Insurance all required rate information for grandfathered individual and specified group health insurance policies at least 120 days before implementing any rate change.

This bill would authorize the department to prohibit a requested rate change if the insurer fails to comply with the above-described timelines.

This bill would also authorize the Insurance Commissioner to exercise their existing authority to enforce the above-described provisions and prohibits an administrative penalty, if assessed, from exceeding $5,000 for each violation, or $10,000 for a willful violation. The bill would also state the intent of the Legislature to encourage self-funded student health coverage offered by the University of California Student Health Insurance Plan and the University of California Voluntary Dependent Plan to maintain or exceed coverage standards of the federal Patient Protection and Affordable Care Act and to comply with the above described provisions.