1349.2
. (a) A health care service plan, including a self-insured
reimbursement plan that pays for or reimburses any part of the cost
of health care services, operated by any city, county, city and
county, public entity, political subdivision, or public joint labor
management trust that satisfies all of the following criteria is
exempt from this chapter:
(1) Provides services or reimbursement only to employees,
retirees, and the dependents of those employees and retirees, of any
participating city, county, city and county, public entity, or
political subdivision, but not to the general public.
(2) Provides funding for the program.
(3) Provides that providers are reimbursed solely on a
fee-for-service basis, so that providers are not at risk in
contracting arrangements.
(4) Complies with Section 1378 and, to the extent that a plan
contracts directly with providers for health care services, complies
with Section 1379.
(5) Does not reduce or change current benefits except in
accordance with collective bargaining agreements, or as otherwise
authorized by the governing body in the case of unrepresented
employees, and provides, pays for, or reimburses at least part of the
cost of all basic health care services as defined in subdivision (b)
of Section 1345. Plans covering only a single specialized health
care service, including dental, vision, or mental health services,
shall not be required to cover all basic health care services.
(6) Refrains from any conduct that constitutes fraud or dishonest
dealing or unfair competition, as defined by Section 17200 of the
Business and Professions Code, and notifies enrollees of their right
to file complaints with the director regarding any violation of this
exemption.
(7) Maintains a fiscally sound operation and makes adequate
provision against the risk of insolvency so that enrollees are not at
risk, individually or collectively, as evidenced by audited
financial statements submitted to the director as of the end of the
plan's fiscal year, within 180 days after the close of that fiscal
year. The financial statements shall be accompanied by a report,
certificate, or opinion of an independent certified public
accountant. The financial statements shall be prepared in accordance
with generally accepted accounting principles. The audit shall be
conducted in accordance with generally accepted auditing standards.
However, audits of public entities or political subdivisions shall be
conducted in accordance with governmental auditing standards. Upon
request, the governing body of the plan shall provide copies thereof,
without charge, to any enrollee or recognized and participating
employee organization.
(8) Submits with the annual financial statements required under
paragraph (7), a declaration, which shall conform to Section 2015.5
of the Code of Civil Procedure, executed by a plan official
authorized by the governing body of the plan, that the plan complies
with this subdivision.
(b) The director's responsibilities under this section shall be
limited to enforcing compliance with this section. Nothing in this
section shall impair or impede the director's enforcement authority
or the remedies available under this chapter, including, but not
limited to, the termination of the plan's exemption under this
section.
(c) A public joint labor management trust is a trust maintained by
one or more participating cities, counties, cities and counties,
public entities, or political subdivisions that appoint management
representatives, and one or more recognized and participating
employee organizations representing the employees of one or more of
the cities, counties, cities and counties, public entities, or
political subdivisions that appoint labor representatives, in which
the management representatives and the labor representatives have
equal voting power in the operation of the trust.
(d) A public joint labor management trust shall not be deemed to
provide services or reimbursement to the general public if, in
addition to providing services or reimbursement to the persons
described in paragraph (1) of subdivision (a), it provides services
or reimbursement only to employees, retirees, and dependents of those
employees and retirees, of the recognized and participating employee
organizations or of the trust.
(e) Nothing in this section shall be construed to prohibit a
recognized and participating employee organization from filing a
complaint with the director regarding a violation of this section.