AB 594 establishes new legal requirements for student health insurance plans offered by institutions of higher education. Since 2024, California law has classified student health insurance as a form of individual coverage but has exempted it from certain regulations, including guaranteed availability, minimum coverage standards, and single risk pool requirements. Once enrolled, students are generally required to maintain their student health insurance for the entire policy year.
Effective July 1, 2026, this bill makes several significant changes to the administration and regulation of student health insurance coverage, including:
- Mid-Year Termination: Students who graduate, take a leave of absence, or withdraw may request to end coverage during the policy year. They must submit the request at least 30 days in advance. Institutions must end coverage within the same month if possible, and no later than the last day of that month. Students remain responsible only for premiums through the termination date, and institutions must issue a pro rata refund for any unused portion if the student prepaid for the year. Enrollment materials must clearly state this right to terminate coverage.
- Waivers for Other Coverage: Institutions must grant a waiver if a student requests it and proves enrollment in other minimum essential coverage (such as Medi-Cal, Covered California, or parental coverage). Institutions may not charge fees or premiums when they grant a waiver.
- Rate Oversight: The bill expands the Department of Insurance’s enforcement authority. The Insurance Commissioner may block rate changes if an insurer misses filing deadlines and may impose administrative penalties of up to $5,000 per violation, or $10,000 for willful violations.
All California institutions of higher education must revise their student health insurance practices. They must allow mid-year termination and pro rata refunds, establish clear waiver procedures for students with other coverage, update enrollment materials, and coordinate with insurers to comply with expanded Department of Insurance oversight.
(AB 594 amends section 10965.03 of the Insurance Code.)
