How exactly does Health Level work?

In Final Fantasy XV, there is an ascension trait called Health Level. It reads as follows:

Increase HP of each party member by twice the number of levels gained. The effects of similar abilities do not stack.

Does this mean that if I unlocked this at, say, level 10, it would give my team 20HP? Is it a one-time thing, as soon as it's unlocked?

In that case, your party members would gain 20HP. This is NOT a one time effect to my knowledge - they will continue to benefit from it as they level up.

The "effect of similar abilities" text is to signify that later Health Level bonuses replace the earlier ones, rather than stack.