A purchasing alliance shall not do any of the following:

(a) Purchase health care services, assume risk for the cost or provision of health services, or otherwise contract with health care providers for the provision of health care services directly to enrollees.

(b) Exclude a small employer or eligible employee or dependent of an eligible employee of a small employer from membership in the purchasing alliance who agrees to pay fees for membership and the premium for coverage through the purchasing alliance and who abides by the bylaws and rules of the purchasing alliance.

(c) Prohibit the participation of small employers, as described in subdivision (a) of Section 1357.03 of the Health and Safety Code and in subdivision (b) of Section 10705, or utilize risk adjustment practices that conflict with the small employer group health provisions described in subdivisions (a) and (b) of Section 1357.12 of the Health and Safety Code and subdivision (b) of Section 10714.

(d) Charge a fee not directly related to the operation of the purchasing alliance.

(e) As a condition of participation, require an employer or small employer, eligible employee or dependent to subscribe to nonhealth care or nonhealth insurance related products or services.

(f) Operate the purchasing alliance or market the purchasing alliance in a service region in a way that would cause the purchasing alliance to select a risk pool with health care utilization that is significantly below the average for all similar groups with similar coverage in the same region.

(g) Engage in any competitive act or practice that results in the selection of small employers and his or her enrollees and dependents based on actual or expected health status, claims experience, medical utilization, industry, occupation, or geographic location within the service region.

(h) Require or take any action inconsistent or in conflict with state laws or regulations.

(Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)