SECTIONS 742.20-742.43

742.20.  The Legislature finds and declares the following: (a) An alternative to insurance programs, health care maintenanceorganizations, and panel provider organizations was established byCongress in 1974 through the Employee Retirement Income Security Act(ERISA). Among the various employee benefit programs established andgoverned by ERISA are multiple employer welfare arrangements (MEWA),which are subject as well to state regulatory and fiscal standardsnot inconsistent with ERISA. MEWAs permit employer members of tradeassociations to create trust funds for the purpose of offering andproviding health care benefits to their employees. MEWAs can becreated as fully insured or self-funded or partially self-fundedbenefit programs. (b) The Legislature recognizes that some MEWAs provide analternative mechanism to traditional health insurance for smallemployers. It is the intent of the Legislature to ensure thefinancial integrity of those MEWA programs that are already inexistence by requiring self-funded or partially self-funded MEWAs toobtain a certificate of compliance from the Department of Insurance.In order for the Department of Insurance to grant a certificate ofcompliance, the MEWA must adhere to standards set forth in this actwhich are not inconsistent with the provisions of ERISA. Further, itis the intent of the Legislature to provide the Department ofInsurance with the authority to levy monetary penalties and to revokecertificates of compliance from MEWAs that violate the provisions ofthis act. (c) The Legislature has passed significant reforms in the area ofsmall group health insurance. This article, in no manner, circumventsthese reforms nor is it intended to be a precedent to do so.Therefore, the small group reform legislation applies to MEWAs to theextent it is not inconsistent with ERISA. (d) The provisions of this article are consistent with andauthorized by ERISA, which confers upon the states limited authorityto regulate MEWAs.742.21.  "Multiple employer welfare arrangement" as used in thisarticle has the same meaning as that contained in Section 1002(40)(A)of Title 29 of the United States Code. "Employee welfare benefitplan," as used in this article, has the same meaning as thatcontained in Section 1002(1) of Title 29 of the United States Code. Amultiple employer welfare arrangement shall comply with the criteriaset forth for an employee welfare benefit plan in order to qualifyto obtain a certificate of compliance.742.215.  As used in this article, "self-funded" means a multipleemployer welfare arrangement that undertook at all times and for acontinuous period of five years to reimburse health benefit costsincurred by covered persons pursuant to the benefits and coveragesprovided by their plan exclusively from plan assets. "Partiallyself-funded" means a multiple employer welfare arrangement thatundertook at all times and for a continuous period of five years toreimburse health benefit costs incurred by covered persons pursuantto the benefits and coverages provided by their plan exclusively fromplan assets, provided, however, that these benefits are reimbursableto the multiple employer welfare arrangement by stop loss insuranceonly to the extent that the benefits exceed fifty thousand dollars($50,000) per claim.742.22.  It is the intent of the Legislature in enacting thisarticle to allow a self-funded or partially self-funded multipleemployer welfare arrangement to meet the requirements for acertificate of compliance to do business in California. If theself-funded or partially self-funded multiple employer welfarearrangement obtains and maintains a certificate of compliance underthese sections, it shall not be considered an unauthorized insurer.742.23.  (a) After December 31, 1995, a self-funded or partiallyself-funded multiple employer welfare arrangement shall not provideany benefits for any resident of this state without first obtaining acertificate of compliance pursuant to this article, provided,however, that if the commissioner has not issued or denied anapplication for a certificate of compliance within 180 calendar daysof the date of the filing of the completed application, thecommissioner shall not take any action against the applicant solelyon the basis that the department has not granted the certificate ofcompliance. (b) The department may take regulatory action against a MEWApursuant to all applicable provisions of this code during the periodbeginning on the effective date of this act and ending on the date onwhich the MEWA is certified under this article, at which time theprovisions of this article shall apply.742.24.  To be eligible for a certificate of compliance, aself-funded or partially self-funded multiple employer welfarearrangement shall meet all of the following requirements: (a) Be nonprofit. (b) Be established and maintained by a trade association, industryassociation, professional association, or by any other businessgroup or association of any kind that has a constitution or bylawsspecifically stating its purpose, and have been organized andmaintained in good faith with at least 200 paid members and operatedactively for a continuous period of five years, for purposes otherthan that of obtaining or providing health care coverage benefits toits members. An association is a California mutual benefitcorporation comprised of a group of individuals or employers whoassociate based solely on participation in a specified profession orindustry, accepting for membership any individual or employer meetingits membership criteria, which do not condition membership directlyor indirectly on the health or claims history of any person, andwhich uses membership dues solely for and in consideration of themembership and membership benefits. (c) Be organized and maintained in good faith with at least 2,000employees and 50 paid employer members and operated actively for acontinuous period of five years. (d) Have been operating in compliance with ERISA on a self-fundedor partially self-funded basis for a continuous period of five yearspursuant to a trust agreement by a board of trustees that shall havecomplete fiscal control over the multiple employer welfarearrangement, and that shall be responsible for all operations of themultiple employer welfare arrangement. The trustees shall be selectedby vote of the participating employers and shall be owners,partners, officers, directors, or employees of one or more employersparticipating in the multiple employer welfare arrangement. A trusteemay not be an owner, officer, or employee of the insurer,administrator, or service company providing insurance orinsurance-related services to the association. The trustees shallhave authority to approve applications of association members forparticipation in the multiple employer welfare arrangement and tocontract with an authorized administrator or service company toadminister the day-to-day affairs of the multiple employer welfarearrangement. (e) Benefits shall be offered only to association members. (f) Benefits may be offered only through life agents, as definedin Section 1622, licensed in the state whose names, addresses, andtelephone numbers have been filed with the commissioner as licensedlife agents for the multiple employer welfare arrangement. (g) Be operated in accordance with sound actuarial principles andconform to the requirements of Section 742.31. (h) File an application with the department for a certificate ofcompliance no later than November 30, 1995. (i) The multiple employer welfare arrangement shall at all timesmaintain aggregate stop loss insurance providing the arrangement withcoverage with an attachment point which is not greater than 125percent of annual expected claims. The commissioner may, byregulation, define "expected claims" for purposes of this subdivisionand provide for adjustments in the amount of the percentage inspecified circumstances in which the arrangement specificallyprovides for and maintains reserves in accordance with soundactuarial principles as provided in Section 742.31. (j) The multiple employer welfare arrangement shall establish andmaintain specific stop loss insurance providing the arrangement withcoverage with an attachment point that is not greater than 5 percentof annual expected claims. The commissioner may, by regulation,define "expected claims" for purposes of this subdivision and providefor adjustments in the amount of that percentage as may be necessaryto carry out the purposes of this subdivision determined by soundactuarial principles as provided in Section 742.31. (k) The multiple employer welfare arrangement shall establish andmaintain appropriate loss and loss adjustment reserves determined bysound actuarial principles as provided in Section 742.31. (l) The association has within its own organization adequatefacilities and competent personnel to serve the multiple employerwelfare arrangement, or has contracted with a licensed third-partyadministrator to provide those services. (m) The association has established a procedure for handlingclaims for benefits in the event of the dissolution of the multipleemployer welfare arrangement. (n) On and after January 1, 2003, in addition to the requirementsof this article, maintain a surplus of not less than one milliondollars ($1,000,000), and that this amount be increased as follows:one million seven hundred fifty thousand dollars ($1,750,000) byJanuary 1, 2004; two million five hundred thousand dollars($2,500,000) by January 1, 2005; three million two hundred fiftythousand dollars ($3,250,000) by January 1, 2006; and four milliondollars ($4,000,000) by January 1, 2007. (o) Submit all proposed rate levels to the department forinformational purposes no later than 45 days prior to theirimplementation. The proposed rates shall contain an aggregate benefitstructure which has a loss ratio experience of not less than 80percent. The loss ratio experience shall be calculated as claims paidduring the contract period plus a reasonable estimate of claimsliability for the contract period at the end of the current yeardivided by contributions paid or collected for the contract periodminus unearned contributions at the end of the current year. (p) Comply with the investment requirements of Section 724.245.742.245.  (a) A self-funded or partially self-funded multipleemployer welfare arrangement shall maintain at least 25 percent ofthe surplus required by subdivision (n) of Section 742.24 ininvestments specified in Article 3 (commencing with Section 1170) ofChapter 2 of Part 2 of Division 1 and in Section 1192.5. (b) The balance of the assets of a self-funded or partiallyself-funded multiple employer welfare arrangement may be invested inthe following: (1) An open-ended diversified management company, as defined inthe federal Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.),that meets all of the following requirements: (A) It is registered with, and reports to, the Securities andExchange Commission. (B) It is domiciled in the United States. (C)  Substantially all of its investments consist of investmentgrade debt instruments and cash. (D) All of its assets are held in the United States by a bank,trust company, or other custodian chartered by the United States, itsstates, or territories. (2) An amount not to exceed 75 percent of any excess of investedassets over the sum of the reserves and related actuarial items heldin support of policies and contracts, plus the surplus required bysubdivision (n) of Section 742.24, may be invested in the following: (A) An open-ended diversified management company, as defined inthe federal Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.),that meets all of the following requirements: (i) It is registered with, and reports to, the Securities andExchange Commission. (ii) It is domiciled in the United States. (iii) Its investments consist of common and preferred stocks andcash. (iv) All of its assets are held in the United States by a bank,trust company, or other custodian chartered by the United States, itsstates, or territories. (B) Corporate notes, bonds, and preferred stocks that meet all ofthe following requirements: (i) The issuer is domiciled in the United States or Canada. (ii) The investments are rated investment grade or better by atleast two of the following rating agencies, or their successors: (I) Standard & Poor's. (II) Moody's. (III) Fitch. (iii) The investments are exchange-traded. "Exchange-traded" asused in this clause means listed and traded on the National MarketSystem of the NASDAQ Stock Market or on a securities exchange subjectto regulation, supervision, or control under a statute of the UnitedStates and acceptable to the commissioner. (C) An investment in a single issuer made pursuant to subparagraph(B) shall not exceed in the aggregate 10 percent of the multipleemployer welfare arrangement's funds described in this paragraph. (3) An investment made pursuant to paragraph (1) or subparagraph(A) of paragraph (2) shall be made in, at minimum, three of thecompanies described in those provisions. (4) An office building or buildings that will be used for themultiple employer welfare arrangement's principal operations andbusiness if both of the following requirements are met: (A) The multiple employer welfare arrangement obtains priorwritten approval from the commissioner. (B) The office building or buildings are treated on the financialstatements filed with the commissioner pursuant to Section 742.31 asnonadmitted assets. (c) The commissioner may, in his or her discretion and after ahearing, require by written order disposal of an investment madeeither in violation of, or no longer in compliance with, thissection. The commissioner may also, after a hearing, require thedisposal of any investment made pursuant to paragraph (2) ofsubdivision (b) if the multiple employer welfare arrangement hasfailed to maintain cash or liquid assets sufficient to meet itsclaims and any other contractual obligations. The commissioner mayalso for good cause and after a hearing, by written order require thedisposal of an investment described in subdivision (b).742.25.  In determining the qualification of a multiple employerwelfare arrangement, the commissioner will consider, among otherthings: (a) The history of the multiple employer welfare arrangement. (b) The competency, character, integrity, responsibility, andgeneral fitness of the management and administration. (c) Financial stability. (d) Whether claims were promptly and fairly adjusted and arepromptly and fully paid in accordance with the law and the terms ofthe plan. (e) Fairness and honesty of methods of doing business. (f) Hazard to covered employees or creditors.742.26.  The multiple employer welfare arrangement shall issue toeach covered employee a certificate evidencing coverage and a summaryplan description of benefits and coverages provided. This evidenceof the benefits and coverage provided shall contain the followingstatement: "The benefits and coverages described herein are providedthrough a trust fund established and funded by the ____ Plan,sponsored by the ____ Association. The trust is a self-funded planestablished under ERISA (29 U.S.C. 1001 et seq.). This is not aninsurance contract and the plan and trust is not acting as, or deemedto be an insurance company."742.27.  The department shall have the authority to revoke acertificate of compliance to any self-funded or partially self-fundedmultiple employer welfare arrangement if the department determinesany of the following: (a) The multiple employer welfare arrangement has failed, afterwritten request by the commissioner, to remove or discharge anyofficer, director, trustee, or other employee who has been convictedof any crime involving fraud, dishonesty, or moral turpitude. (b) The multiple employer welfare arrangement has unreasonablyfailed or refused to furnish any report or statement or hasunreasonably refused the department access to its books or records asrequired by this article. (c) The multiple employer welfare arrangement has failed for anunreasonable period to pay any judgment rendered against it by acourt or other applicable regulatory agency or body. (d) The multiple employer welfare arrangement is conductingbusiness fraudulently or is not meeting its contractual obligationsin good faith. (e) The multiple employer welfare arrangement fails to comply withthe provisions of Section 790.03. (f) The multiple employer welfare arrangement fails to comply withChapter 14 (commencing with Section 10700) of Part 2 of Division 2. (g) The multiple employer welfare arrangement fails to comply withArticle 3.1 (commencing with Section 1357) of Chapter 2.2 ofDivision 2 of the Health and Safety Code. (h) The multiple employer welfare arrangement fails to establish,or at all times maintain, compliance with the requirements of thisarticle, or other laws made applicable to the multiple employerwelfare arrangement by this article.742.28.  A self-funded or partially self-funded multiple employerwelfare arrangement authorized by this article shall be limited toproviding the following benefits: (a) Medical, dental, optical, surgical, or other hospital carebenefits. (b) Benefits in the event of sickness, accident, or disability. (c) Flexible benefits under Section 125 of the Internal RevenueCode. These benefits shall not include loss from liability imposed bylaw upon employers to compensate employees and their dependents forinjury sustained by the employees arising out of and in the course ofthe employment, irrespective of negligence or the fault of eitherparty.742.29.  An association seeking to establish an employee welfarebenefit plan by the use of a self-funded or partially self-fundedmultiple employer welfare arrangement shall apply for a certificateof compliance on a form prescribed by the commissioner. Theapplication shall be completed and submitted to the commissioneralong with all of the following: (a) Copies of all articles, bylaws, agreements, or other documentsor instruments describing the rights and obligations of theemployers, employees, and beneficiaries of the association withrespect to the multiple employer welfare arrangement. (b) Current audited financial statements of the association andthe multiple employer welfare arrangement, and Internal RevenueService Form number 5500 for the last five years. (c) Proof of a fidelity bond in an amount equal to 10 percent ofthe funds handled annually by the multiple employer welfarearrangement. In no case may the amount of the bond be less than fiftythousand dollars ($50,000) nor more than five hundred thousanddollars ($500,000). (d) A fiduciary liability policy with limits of not less than fivehundred thousand dollars ($500,000). (e) A statement showing in full detail the benefit plan upon whichthe association has established and maintained the multiple employerwelfare arrangement. (f) A copy of all contracts or other instruments that it makeswith or issues to the association members, together with a copy ofits plan description and the printed material which was used inenrolling members during 1993 and 1994. (g) Proof of aggregate and specific stop loss insurance with aninsurer licensed to do business in this state. (h) A copy of all contracts or other instruments that were usedwith administrators and producers during 1993 and 1994. (i) Biographical affidavits for the trustees, plan administratorsof the multiple employer welfare arrangement, officers and directorsof the association, other persons acting in a fiduciary capacity andany third-party administrators performing services on behalf of themultiple employer welfare arrangement.742.30.  The commissioner shall not issue a certificate ofcompliance to a self-funded or partially self-funded multipleemployer welfare arrangement unless the employers participating inthe multiple employer welfare arrangement are members of a bona fidetrade, industrial, or professional association as described insubdivision (b) of Section 742.24.742.31.  Each self-funded or partially self-funded multiple employerwelfare arrangement transacting business in the state shall file allof the following with the commissioner: (a) No later than May 15th of each calendar year or four monthsand 15 days after the end of each fiscal year not on a calendar yearbasis, financial statements audited by a certified public accountant,and no later than March 1 of each calendar year or 60 days after theend of each fiscal year not on a calendar year basis, an actuarialopinion rendered by a qualified actuary that satisfies therequirements of Section 10489.15. The opinion shall be based onstandards adopted from time to time by the Actuarial Standards Boardand on any additional standards that the commissioner may, byregulation, prescribe. For the purposes of this section, "qualifiedactuary" means a member in good standing of the American Academy ofActuaries who meets the requirements set forth in regulations of thecommissioner. The qualified actuary shall be liable for damages toany person caused by his or her negligence or other tortious conduct. (b) Within 60 days after the end of each fiscal quarter, unauditedfinancial statements, affirmed by an appropriate officer or agent ofthe multiple employer welfare arrangement. (c) Within 60 days after the end of each fiscal quarter, a reportcertifying that the multiple employer welfare arrangement maintainscash or liquid assets in a claim reserve account sufficient to meetits contractual obligations and that it maintains a policy ofaggregate and specific stop loss insurance.742.32.  The commissioner or any persons designated by thecommissioner shall have the power to examine the affairs of anyself-funded or partially self-funded multiple employer welfarearrangement and the association which established and maintains it,and for that purpose shall have access to all books, records, anddocuments that relate to the business of the multiple employerwelfare arrangement, and may examine under oath its trustees,officers, agents, and employees in relation to the affairs,transactions, and condition of the multiple employer welfarearrangement.742.33.  Books, records, and documents pertaining to the business ofthe multiple employer welfare arrangement shall be maintained by theadministrator for a period of five years. "Administrator," as usedin this section, has the same meaning as that contained in Section1002(16)(A) of Title 29 of the United States Code.742.34.  (a) The following notice shall be provided to employers andemployees who obtain coverage from a multiple employer welfarearrangement: NOTICE (A) THE MULTIPLE EMPLOYER WELFARE ARRANGEMENT IS NOT AN INSURANCECOMPANY AND DOES NOT PARTICIPATE IN ANY OF THE GUARANTEE FUNDSCREATED BY CALIFORNIA LAW. THEREFORE, THESE FUNDS WILL NOT PAY YOURCLAIMS OR PROTECT YOUR ASSETS IF A MULTIPLE EMPLOYER WELFAREARRANGEMENT BECOMES INSOLVENT AND IS UNABLE TO MAKE PAYMENTS ASPROMISED. (B) THE HEALTH CARE BENEFITS THAT YOU HAVE PURCHASED OR AREAPPLYING TO PURCHASE ARE BEING ISSUED BY A MULTIPLE EMPLOYER WELFAREARRANGEMENT THAT IS LICENSED BY THE STATE OF CALIFORNIA. (C) FOR ADDITIONAL INFORMATION ABOUT THE MULTIPLE EMPLOYER WELFAREARRANGEMENT YOU SHOULD ASK QUESTIONS OF YOUR TRUST ADMINISTRATOR ORYOU MAY CONTACT THE CALIFORNIA DEPARTMENT OF INSURANCE AT ________. (b) Each multiple employer welfare arrangement should include thedepartment's current "800" consumer service telephone number in theblank provided in paragraph (C) of this notice.742.35.  The department may conduct an examination of the financialcondition of a self-funded or partially self-funded multiple employerwelfare arrangement, and if it determines that the multiple employerwelfare arrangement's financial condition does not comply with therequirements of this article, the department may apply any remediesauthorized by this code.742.36.  Subject to the annual fee provisions of Section 742.39,every certificate of compliance shall be for an indefinite term andshall expire with the expiration or termination of the existence ofthe holder thereof. Notwithstanding the provisions of this section,whenever the commissioner shall determine, after notice and hearing,that any person to whom the certificate has been issued is in arrearsto the state or to any county or city in the state for fees,licenses, taxes, assessments, fines, or penalties, accrued onbusiness transacted in the state, or is otherwise in default forfailure to comply with any of the laws of this state regarding thegovernmental control of the person by the state, the commissioner mayorder the certificate holder to comply with those requirementswithin 30 days of that determination. If the certificate ofcompliance holder fails to comply within that period, the certificateof compliance may then be revoked, unless the commissioner's orderis stayed by a court of appropriate jurisdiction.742.37.  (a) The commissioner may suspend the certificate ofcompliance of a holder thereof for not exceeding one year whenever heor she finds, after proper hearing following notice, that the personengages in any of the following practices: (1) Conducting its business fraudulently. (2) Not carrying out its contracts in good faith. (3) Habitually and as a matter of ordinary practice and customcompelling claimants under policies, or liability judgment creditorsof the certificate of compliance holder, to either accept less thanthe amount due under the terms of its contracts or resort tolitigation against the certificate of compliance holder to secure thepayment of the amount due. (b) The order of suspension shall prescribe the period of eachsuspension. (c) Proceedings under this section shall be conducted inaccordance with Chapter 5 (commencing with Section 11500) of Part 1of Division 3 of Title 2 of the Government Code, except that thehearings shall be conducted by administrative law judges chosen underSection 11502 or appointed by the commissioner.742.38.  The commissioner, in any proceeding under Section 742.37for any of the violations specified in that section, may byalternative order permit the holder of that certificate of complianceto elect in writing to pay a specified money penalty, within aspecified time, in lieu of the suspension of its certificate ofcompliance. If the holder so elects, the sum of money specified shallbe paid to the commissioner for use of the state, and shall notexceed fifty-five thousand dollars ($55,000). If the holder soelecting fails to pay the specified sum within the specified time,the commissioner shall, unless his or her order is stayed, put ineffect the alternatives specified in his or her order. All money received by the commissioner pursuant to this sectionshall, when appropriated for that purpose by the Legislature, beavailable for expenditure by the commissioner in accordance with lawin administration and enforcement of this code and other insurancelaws. The authority vested in the commissioner by this section shall beadditional to and not in lieu of any other authority to enforce anypenalties, fines or forfeitures, denials, suspensions, restrictions,or revocations of certificates of compliance unless otherwiseauthorized by law.742.39.  The commissioner shall require the payment of threethousand five hundred dollars ($3,500) in advance as a fee for filingan application for each certificate of compliance. NotwithstandingSection 742.36, each holder of a certificate of compliance ofindefinite term shall owe and pay an annual fee of two hundredeighty-three dollars ($283) in advance on account of the certificateuntil final expiration. In addition, each holder of a certificate ofcompliance of indefinite term shall owe and pay an annual fee of twohundred eighty-one dollars ($281) for filing of financialinformation. These fees shall be for annual periods commencing onJuly 1 of each year and ending on June 30 of each year, and shall bedue on each March 1 and be delinquent on and after April 1.742.40.  (a) A multiple employer welfare arrangement shall offerhealth care coverage benefits to any new eligible person and his orher dependents under terms and conditions no less favorable to thoseoffered to their employers' existing employees and their dependents,if the newly eligible person had health care benefit coverage witheither the same or a different multiple employer welfare arrangementwithin 31 days. The new coverage shall comply with existingeligibility rules of the multiple employer welfare arrangement. (b) A multiple employer welfare arrangement shall comply with therequirements set forth in Sections 10198.7 and 10198.9.742.405.  (a) No multiple employer welfare arrangement shall refuseto enroll any person or accept any person as a subscriber or renewany person as a subscriber after appropriate application on the basisof a person's genetic characteristics that may, under somecircumstances, be associated with disability in that person or thatperson's offspring. No multiple employer welfare arrangement shallrequire a higher rate or charge, or offer or provide different terms,conditions, or benefits, on the basis of a person's geneticcharacteristics that may, under some circumstances, be associatedwith disability in that person or that person's offspring than is atthat time required of any other individual in an otherwise identicalclassification, nor shall any multiple employer welfare arrangementmake or require any rebate, discrimination, or discount upon theamount to be paid or the service to be rendered under the arrangementbecause the person carries those traits. (b) No multiple employer welfare arrangement shall seekinformation about a person's genetic characteristics for anynontherapeutic purpose. (c) No discrimination shall be made in the fees or commissions ofa solicitor or solicitor firm for an enrollment or a subscription orthe renewal of an enrollment or subscription of any person on thebasis of a person's genetic characteristics that may, under somecircumstances, be associated with disability in that person or thatperson's offspring. (d) "Genetic characteristics" as used in this section shall havethe same meaning as defined in Section 10123.3.742.407.  (a) This section shall apply to the disclosure of genetictest results contained in an applicant or enrollee's medical recordsby a multiple employer welfare arrangement. (b) Any person who negligently discloses results of a test for agenetic characteristic to any third party in a manner that identifiesor provides identifying characteristics of the person to whom thetest results apply, except pursuant to a written authorization asdescribed in subdivision (g), shall be assessed a civil penalty in anamount not to exceed one thousand dollars ($1,000) plus court costs,as determined by the court, which penalty and costs shall be paid tothe subject of the test. (c) Any person who willfully discloses the results of a test for agenetic characteristic to any third party in a manner thatidentifies or provides identifying characteristics of the person towhom the test results apply, except pursuant to a writtenauthorization as described in subdivision (g), shall be assessed acivil penalty in an amount not less than one thousand dollars($1,000) and no more than five thousand dollars ($5,000) plus courtcosts, as determined by the court, which penalty and costs shall bepaid to the subject of the test. (d) Any person who willfully or negligently discloses the resultsof a test for a genetic characteristic to a third party in a mannerthat identifies or provides identifying characteristics of the personto whom the test results apply, except pursuant to a writtenauthorization as described in subdivision (g), that results ineconomic, bodily, or emotional harm to the subject of the test, isguilty of a misdemeanor punishable by a fine not to exceed tenthousand dollars ($10,000). (e) In addition to the penalties listed in subdivisions (b) and(c), any person who commits any act described in subdivision (b) or(c) shall be liable to the subject for all actual damages, includingdamages for economic, bodily, or emotional harm which is proximatelycaused by the act. (f) Each disclosure made in violation of this section is aseparate and actionable offense. (g) The applicant's "written authorization," as used in thissection, shall satisfy the following requirements: (1) Is written in plain language. (2) Is dated and signed by the individual or a person authorizedto act on behalf of the individual. (3) Specifies the types of persons authorized to discloseinformation about the individual. (4) Specifies the nature of the information authorized to bedisclosed. (5) States the name or functions of the persons or entitiesauthorized to receive the information. (6) Specifies the purposes for which the information is collected. (7) Specifies the length of time the authorization shall remainvalid. (8) Advises the person signing the authorization of the right toreceive a copy of the authorization. Written authorization isrequired for each separate disclosure of the test results, and theauthorization shall set forth the person or entity to whom thedisclosure would be made. (h) This section shall not apply to disclosures required by theDepartment of Health Services necessary to monitor compliance withChapter 1 (commencing with Section 124975) of Part 5 of Division 106of the Health and Safety Code, nor to disclosures required by theDepartment of Managed Health Care necessary to administer and enforcecompliance with Section 1374.7 of the Health and Safety Code.742.41.  All employer groups who have health care coverage benefitsprovided by a multiple employer welfare arrangement for theiremployees and their dependents, regardless of individual condition orhistory of that employee and their dependents, shall continue toprovide coverage thereunder pursuant to the terms and conditions oftheir multiple employer welfare arrangement, subject to onlycancellation for nonpayment of contribution, or in the event of thetermination of the multiple employer welfare arrangement.742.42.  The provisions of this code governing domestic incorporatedinsurers, their business, and their contracts shall, so far asapplicable and not inconsistent, govern multiple employer welfarearrangements subject to this article and the business and contractsof these multiple employer welfare arrangements, except that thesemultiple employer welfare arrangements, their business, and theircontracts shall not be subject to Article 14.7 (commencing withSection 1067) of Chapter 1 of Part 2 of Division 1. There shall be arebuttable presumption that any provision of this code is applicableto multiple employer welfare arrangements.742.425.  The provisions of this article shall not apply to multipleemployer welfare arrangements as defined in Section 1144(b)(6)(D) ofTitle 29 of the United States Code.742.43.  The commissioner may adopt reasonable rules and regulationsfor the implementation and administration of this article.