AB 1823 – Expands Student Health Insurance Coverage

Assembly Bill 1823 (AB 1823) establishes new legal obligations for student health insurance coverage provided through institutions of higher education.  AB 1823 requires, for policy years beginning on or after January 1, 2024, student health insurance coverage to be considered individual health insurance coverage.  AB 1823 defines student health insurance coverage as a blanket disability insurance policy provided to students enrolled in an institution of higher education and to their dependents pursuant to an agreement between the institution of higher education and an insurer that covers hospital, medical, or surgical benefits that meets all of the following conditions:

1. Does not make coverage available other than in connection with enrollment as a student, or as a dependent of a student, in the institution of higher education.
2. Does not condition eligibility for insurance coverage on any health status-related factor relating to a student or a dependent of a student.
3. Does not condition eligibility, an offer, issuance, a sale, or renewal for the insurance coverage on any factor other than enrollment as a student or dependent of a student in the institution of higher education.

California residents are required to obtain and maintain qualifying health insurance.  Students who already have minimum essential coverage consistent with applicable legal requirements are exempt from purchasing a blanket disability insurance policy through their institution of higher education.

AB 1823 further generally requires a blanket disability insurance policy that meets the definition of student health insurance coverage to comply with insurance provisions that are applicable to non-grandfathered individual health insurance, including, among others, essential health benefits requirements and annual limits on out-of-pocket expenses.  AB 1823 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.

AB 1823 also requires institutions of higher education to include the following notice in student health insurance enrollment materials printed in clear, conspicuous, 14-point bold type:

California requires residents and their dependents to obtain, and maintain, health coverage or pay a penalty unless they qualify for an exemption. Enrolling in student health insurance offered by the college or university you are attending is one way to meet this requirement.

You may be eligible to get free or low-cost health coverage through Medi-Cal regardless of immigration status. In addition, you may be eligible for free or low-cost health coverage through Covered California. Visit Covered California at www.coveredca.com to learn about health coverage options that are available for you and your dependents, and how you might qualify to get financial assistance with the cost of coverage.

If you are under 26 years of age, you may be eligible for coverage as a dependent in a group health plan of your parent’s employer or under your parents’ individual market coverage. In addition, you may be eligible to buy individual health insurance directly from a health insurer or health plan, regardless of immigration status.

Please examine your options carefully to see if other options are more affordable and whether you are currently eligible to enroll in these other forms of coverage pursuant to an open or special enrollment period.

Institutions of higher education may also provide this notice on their internet website in addition to including it in the enrollment materials.

(AB 1823 adds Section 10965.03 to the Insurance Code.)