Contracts between purchasing alliances and participating employers shall provide all of the following:

(a) For administrative purposes, the purchasing alliance shall be the policyholder or contractholder of the health benefit plan or ancillary benefit plan on behalf of participating employers, their eligible employees, and dependents.

(b) That the participating carrier will issue a certificate of coverage, or equivalent document, specifying the essential features of the health benefit plan’s or ancillary benefit plan’s coverage to each enrolled eligible employee.

(c) The following notice shall be provided to employers, small employers, and eligible employees who obtain coverage from a purchasing alliance at the time of enrollment:

NOTICE

(1) THE PURCHASING ALLIANCE IS NOT AN INSURANCE COMPANY AND DOES NOT PAY BENEFITS OR CLAIMS. IT COLLECTS AND DISTRIBUTES PREMIUMS IN YOUR EMPLOYER’S BEHALF TO INSURERS WHO MAY PARTICIPATE IN A GUARANTEE FUND CREATED BY CALIFORNIA LAW. THE ALLIANCE ITSELF DOES NOT PARTICIPATE IN A GUARANTEE FUND CREATED BY CALIFORNIA LAW.

(2) THE PURCHASING ALLIANCE WHICH YOUR EMPLOYER HAS JOINED IS REGISTERED BY THE CALIFORNIA DEPARTMENT OF INSURANCE TO PROVIDE SPECIFIC ADMINISTRATIVE SERVICES AND MAY NOT ASSUME ANY RISK FOR CLAIM AND BENEFIT PAYMENTS.

(3) FOR ADDITIONAL INFORMATION ABOUT THE PURCHASING ALLIANCE YOU SHOULD ASK QUESTIONS OF YOUR BENEFITS ADMINISTRATOR OR YOU MAY CONTACT THE CALIFORNIA DEPARTMENT OF INSURANCE AT 1-800-927-4356.

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