AB 594 amends California Insurance Code Section 10965.03 governing student health insurance coverage. Beginning July 1, 2026, the bill allows a student certificate holder to request mid-year termination of student health insurance if the student graduates, takes a leave of absence, or is no longer enrolled, provided the institution receives notice at least 30 days in advance. The institution must end coverage as soon as feasible in the same calendar month, or by the end of that month at the latest, and the student is responsible only for premiums through the termination date, with pro rata refunds required when premiums were prepaid for the term.
The bill also requires institutions to grant a waiver from student health insurance coverage when a student has other minimum essential coverage and requests the waiver, and it bars charging a fee or premium in that circumstance. In addition, it strengthens rate-review enforcement by allowing the Department of Insurance to prohibit a proposed rate change if an insurer misses statutory filing deadlines, and it authorizes administrative penalties for violations up to $5,000 per violation, or $10,000 for willful violations. The bill preserves existing exemptions and special rules for student health plans, including separate risk pools and rating rules, while maintaining a minimum actuarial value standard of 60 percent.
AB 594’s practical impact is on student health plans offered through colleges, universities, and related disability insurers, as well as on institutions of higher education that administer those plans. It clarifies when coverage can end, how premiums are prorated, and when waivers must be granted, which should reduce students’ liability for coverage they no longer need after leaving school or after securing other qualifying coverage. It also affects the Department of Insurance by giving it an additional enforcement tool over rate filings and by expressly setting penalty limits.
The bill appears to have had broad support throughout the legislative process. The recorded votes were unanimous or near-unanimous at each stage, including committee votes, floor passage, and concurrence in Senate amendments, and the bill was ultimately chaptered as Chapter 272 of the Statutes of 2025. The absence of recorded opposition in the voting history suggests the measure was generally viewed as a consumer-protection and administrative-clarification bill rather than a controversial policy change.
The main points of contention, based on the text, would likely have centered on administrative burden and insurer flexibility rather than the core policy goals. The bill imposes new termination-processing obligations on institutions, requires refunds and premium-liability notices, and gives the Department of Insurance authority to block late rate changes, which could concern insurers and plan administrators. At the same time, the bill preserves many existing student-plan exemptions and specifically encourages University of California self-funded plans to maintain ACA-level coverage, indicating an effort to balance student protections with the special structure of student health insurance.
AB 594 amends Insurance Code Section 10965.03 to add new termination, waiver, notice, rate-review, and enforcement rules for student health insurance coverage. It requires institutions of higher education and insurers to process mid-year terminations for students who graduate, withdraw, or take a leave, to prorate premiums and refunds, and to grant waivers when students have minimum essential coverage. It also authorizes the Department of Insurance to block untimely rate changes and to assess limited administrative penalties, while leaving in place the existing framework that treats student health insurance as a specialized form of coverage with certain exemptions from general individual-market rules.
The bill’s legislative history shows overwhelmingly positive sentiment. Committee and floor votes were unanimous or nearly unanimous, and the measure advanced through both houses without recorded opposition in the provided history. That pattern suggests broad agreement that the bill improves consumer protections and clarifies administration of student health plans without fundamentally altering the student insurance market.
The likely areas of concern are operational rather than ideological. Colleges and universities must implement a new 30-day termination process, issue premium-liability notices, and handle prorated refunds, while insurers face tighter consequences for missing rate-filing deadlines. Insurers may also view the Department of Insurance’s new authority to prohibit a rate change as a stronger regulatory tool. By contrast, student advocates and policymakers likely supported the bill because it reduces unnecessary premium charges and ensures students with other qualifying coverage are not forced to buy duplicative insurance.