2009 California Health and Safety Code - Section 1340-1345 :: Article 1. General

1340.  This chapter shall be known and may be cited as the
Knox-Keene Health Care Service Plan Act of 1975.

1341.  (a) There is in state government, in the Business,
Transportation and Housing Agency, a Department of Managed Health
Care that has charge of the execution of the laws of this state
relating to health care service plans and the health care service
plan business including, but not limited to, those laws directing the
department to ensure that health care service plans provide
enrollees with access to quality health care services and protect and
promote the interests of enrollees.
   (b) The chief officer of the Department of Managed Health Care is
the Director of the Department of Managed Health Care. The director
shall be appointed by the Governor and shall hold office at the
pleasure of the Governor. The director shall receive an annual salary
as fixed in the Government Code. Within 15 days from the time of the
director's appointment, the director shall take and subscribe to the
constitutional oath of office and file it in the office of the
Secretary of State.
   (c) The director shall be responsible for the performance of all
duties, the exercise of all powers and jurisdiction, and the
assumption and discharge of all responsibilities vested by law in the
department. The director has and may exercise all powers necessary
or convenient for the administration and enforcement of, among other
laws, the laws described in subdivision (a).

1341.1.  The director shall have his or her principal office in the
City of Sacramento, and may establish branch offices in the City and
County of San Francisco, in the City of Los Angeles, and in the City
of San Diego. The director shall from time to time obtain the
necessary furniture, stationery, fuel, light, and other proper
conveniences for the transaction of the business of the Department of
Managed Health Care.

1341.2.  In accordance with the laws governing the state civil
service, the director shall employ and, with the approval of the
Department of Finance, fix the compensation of such personnel as the
director needs to discharge properly the duties imposed upon the
director by law, including, but not limited to, a chief deputy, a
public information officer, a chief enforcement counsel, and legal
counsel to act as the attorney for the director in actions or
proceedings brought by or against the director under or pursuant to
any provision of any law under the director's jurisdiction, or in
which the director joins or intervenes as to a matter within the
director's jurisdiction, as a friend of the court or otherwise, and
stenographic reporters to take and transcribe the testimony in any
formal hearing or investigation before the director or before a
person authorized by the director. The personnel of the Department of
Managed Health Care shall perform such duties as the director
assigns to them. Such employees as the director designates by rule or
order shall, within 15 days after their appointments, take and
subscribe to the constitutional oath of office and file it in the
office of the Secretary of State.

1341.3.  The director shall adopt a seal bearing the inscription:
"Director, Department of Managed Health Care, State of California."
The seal shall be affixed to or imprinted on all orders and
certificates issued by him or her and such other instruments as he or
she directs. All courts shall take judicial notice of this seal.

1341.4.  (a) In order to effectively support the Department of
Managed Health Care in the administration of this law, there is
hereby established in the State Treasury, the Managed Care Fund. The
administration of the Department of Managed Health Care shall be
supported from the Managed Care Fund.
   (b) In any fiscal year, the Managed Care Fund shall maintain not
more than a prudent 5 percent reserve unless otherwise determined by
the Department of Finance.

1341.45.  (a) There is hereby created in the State Treasury the
Managed Care Administrative Fines and Penalties Fund.
   (b) The fines and administrative penalties collected pursuant to
this chapter, on and after the operative date of this section, shall
be deposited into the Managed Care Administrative Fines and Penalties
Fund.
   (c) The fines and administrative penalties deposited into the
Managed Care Administrative Fines and Penalties Fund shall be
transferred by the department, beginning September 1, 2009, and
annually thereafter, as follows:
   (1) The first one million dollars ($1,000,000) shall be
transferred to the Medically Underserved Account for Physicians
within the Health Professions Education Fund and shall, upon
appropriation by the Legislature, be used for the purposes of the
Steven M. Thompson Physician Corps Loan Repayment Program, as
specified in Article 5 (commencing with Section 128550) or Chapter 5
of Part 3 of Division 107 and, notwithstanding Section 128555, shall
not be used to provide funding for the Physician Volunteer Program.
   (2) Any amount over the first one million dollars ($1,000,000),
including accrued interest, in the fund shall be transferred to the
Major Risk Medical Insurance Fund created pursuant to Section 12739
of the Insurance Code and shall, upon appropriation by the
Legislature, be used for the Major Risk Medical Insurance Program for
the purposes specified in Section 12739.1 of the Insurance Code.
   (d) Notwithstanding subdivision (b) of Section 1356 and Section
1356.1, the fines and administrative penalties authorized pursuant to
this chapter shall not be used to reduce the assessments imposed on
health care service plans pursuant to Section 1356.

1341.5.  (a) The director, as a general rule, shall publish or make
available for public inspection any information filed with or
obtained by the department, unless the director finds that this
availability or publication is contrary to law. No provision of this
chapter authorizes the director or any of the director's assistants,
clerks, or deputies to disclose any information withheld from public
inspection except among themselves or when necessary or appropriate
in a proceeding or investigation under this chapter or to other
federal or state regulatory agencies. No provision of this chapter
either creates or derogates from any privilege that exists at common
law or otherwise when documentary or other evidence is sought under a
subpoena directed to the director or any of his or her assistants,
clerks, or deputies.
   (b) It is unlawful for the director or any of his or her
assistants, clerks, or deputies to use for personal benefit any
information that is filed with or obtained by the director and that
is not then generally available to the public.

1341.6.  (a) The Attorney General shall render to the director
opinions upon all questions of law, relating to the construction or
interpretation of any law under the director's jurisdiction or
arising in the administration thereof, that may be submitted to the
Attorney General by the director and upon the director's request
shall act as the attorney for the director in actions and proceedings
brought by or against the director under or pursuant to any
provision of any law under the director's jurisdiction.
   (b) Sections 11041, 11042, and 11043 of the Government Code do not
apply to the Director of the Department of Managed Health Care.

1341.7.  (a) Neither the director nor any of the director's
assistants, clerks, or deputies shall be interested as a director,
officer, shareholder, member other than a member of an organization
formed for religious purposes, partner, agent, or employee of any
person who, during the period of the official's or employee's
association with the Department of Managed Health Care, was licensed
or applied for a license as a health care service plan under this
chapter.
   (b) Nothing contained in subdivision (a) shall prohibit the
holdings or purchasing of any securities by the director, an
assistant, clerk, or deputy in accordance with rules which shall be
adopted for the purpose of protecting the public interest and
avoiding conflicts of interest.
   (c) Nothing in this section shall prohibit or preclude the
director or any of the director's assistants, clerks, or deputies or
any employee of the Department of Managed Health Care from obtaining
health care services as a subscriber or an enrollee from a plan
licensed under this chapter, subject to any rules that may be adopted
hereunder or pursuant to proper authority.

1341.8.  The director shall have the powers of a head of a
department pursuant to Chapter 2 (commencing with Section 11150) of
Part 1 of Division 3 of Title 2 of the Government Code. The director
may make the agreements that he or she deems necessary or appropriate
in exercising his or her powers.

1341.9.  The director and department succeed to, and are vested
with, all duties, powers, purposes, responsibilities, and
jurisdiction of the Commissioner of Corporations and the Department
of Corporations as they relate to the Department of Corporations'
Health Plan Program, health care service plans, and the health care
service plan business, including those powers and duties specified in
this chapter. Nothing in this section abrogates, limits, diminishes,
or otherwise restricts the duties, powers, purposes,
responsibilities, and jurisdictions of the Commissioner of
Corporations and the Department of Corporations under the Investment
Program, the Financial Services Program, and the other laws in which
jurisdiction is vested in the Commissioner of Corporations and the
Department of Corporations.

1341.10.  The department may use the unexpended balance of funds
available for use in connection with the performance of the functions
of the Department of Corporations to which the department succeeds
pursuant to Section 1341.9.

1341.11.  All officers and employees of the Department of
Corporations who, on the operative date of this section, are
performing any duty, power, purpose, responsibility, or jurisdiction
to which the department succeeds, who are serving in the state civil
service, other than as temporary employees, and engaged in the
performance of a function vested by the department by Section 1341.9,
shall be transferred to the department. The status, positions, and
rights of those persons shall not be affected by the transfer and
shall be retained by those persons as officers and employees of the
department, pursuant to the State Civil Service Act (Part 2
(commencing with Section 18500) of Division 5 of Title 2 of the
Government Code), except as to positions exempted from civil service.

1341.12.  The department shall have possession and control of all
records, papers, offices, equipment, supplies, moneys, funds,
appropriations, licenses, permits, agreements, contracts, claims,
judgments, land, and other property, real or personal, connected with
the administration of, or held for the benefit or use of, the
Department of Corporations for the performance of the functions
transferred to the department by Section 1341.9.

1341.13.  All officers or employees of the department employed after
the operative date of this section shall be appointed by the
director.

1341.14.  (a) Any regulation, order, or other action, adopted,
prescribed, taken, or performed by the Department of Corporations or
by an officer of the Department of Corporations in the administration
of a program or the performance of a duty, responsibility, or
authorization transferred to the department by Section 1341.9 shall
remain in effect and shall be deemed to be a regulation, order, or
action of the department.
   (b) No suit, action, or other proceeding lawfully commenced by or
against the Department of Corporations or any other officer of the
state, in relation to the administration of any program or the
discharge of any duty, responsibility, or authorization transferred
to the department by Section 1341.9 shall abate by reason of the
transfer of the program, duty, responsibility, or authorization.

1342.  It is the intent and purpose of the Legislature to promote
the delivery and the quality of health and medical care to the people
of the State of California who enroll in, or subscribe for the
services rendered by, a health care service plan or specialized
health care service plan by accomplishing all of the following:
   (a) Ensuring the continued role of the professional as the
determiner of the patient's health needs which fosters the
traditional relationship of trust and confidence between the patient
and the professional.
   (b) Ensuring that subscribers and enrollees are educated and
informed of the benefits and services available in order to enable a
rational consumer choice in the marketplace.
   (c) Prosecuting malefactors who make fraudulent solicitations or
who use deceptive methods, misrepresentations, or practices which are
inimical to the general purpose of enabling a rational choice for
the consumer public.
   (d) Helping to ensure the best possible health care for the public
at the lowest possible cost by transferring the financial risk of
health care from patients to providers.
   (e) Promoting effective representation of the interests of
subscribers and enrollees.
   (f) Ensuring the financial stability thereof by means of proper
regulatory procedures.
   (g) Ensuring that subscribers and enrollees receive available and
accessible health and medical services rendered in a manner providing
continuity of care.
   (h) Ensuring that subscribers and enrollees have their grievances
expeditiously and thoroughly reviewed by the department.

1342.4.  (a) The Department of Managed Health Care and the
Department of Insurance shall maintain a joint senior level working
group to ensure clarity for health care consumers about who enforces
their patient rights and consistency in the regulations of these
departments.
   (b) The joint working group shall undertake a review and
examination of the Health and Safety Code, the Insurance Code, and
the Welfare and Institutions Code as they apply to the Department of
Managed Health Care and the Department of Insurance to ensure
consistency in consumer protection.
   (c) The joint working group shall review and examine all of the
following processes in each department:
   (1) Grievance and consumer complaint processes, including, but not
limited to, outreach, standard complaints, including coverage and
medical necessity complaints, independent medical review, and
information developed for consumer use.
   (2) The processes used to ensure enforcement of the law,
including, but not limited to, the medical survey and audit process
in the Health and Safety Code and market conduct exams in the
Insurance Code.
   (3) The processes for regulating the timely payment of claims.
   (d) The joint working group shall report its findings to the
Insurance Commissioner and the Director of the Department of Managed
Health Care for review and approval. The commissioner and the
director shall submit the approved final report under signature to
the Legislature by January 1 of every year for five years.

1342.5.  The director shall consult with the Insurance Commissioner
prior to adopting any regulations applicable to health care service
plans subject to this chapter and other entities governed by the
Insurance Code for the specific purpose of ensuring, to the extent
practical, that there is consistency of regulations applicable to
these plans and entities by the Insurance Commissioner and the
Director of the Department of Managed Health Care.

1342.6.  It is the intent of the Legislature to ensure that the
citizens of this state receive high-quality health care coverage in
the most efficient and cost-effective manner possible. In furtherance
of this intent, the Legislature finds and declares that it is in the
public interest to promote various types of contracts between public
or private payers of health care coverage, and institutional or
professional providers of health care services. This intent has been
demonstrated by the recent enactment of Chapters 328, 329, and 1594
of the Statutes of 1982, authorizing various types of contracts to be
entered into between public or private payers of health care
coverage, and institutional or professional providers of health care
services. The Legislature further finds and declares that individual
providers, whether institutional or professional, and individual
purchasers, have not proven to be efficient-sized bargaining units
for these contracts, and that the formation of groups and
combinations of institutional and professional providers and
combinations of purchasing groups for the purpose of creating
efficient-sized contracting units represents a meaningful addition to
the health care marketplace. The Legislature further finds and
declares that negotiations between purchasers or payers of health
services, and health care service plans governed by the provisions of
this chapter, or through a person or entity acting for, or on behalf
of, a purchaser or payer of health services, or a health care
service plan, are in furtherance of the public's interest in
obtaining quality health care services in the most efficient and
cost-effective manner possible. It is the intent of the Legislature,
therefore, that the formation of groups and combinations of providers
and purchasing groups for the purpose of creating efficient-sized
contracting units be recognized as the creation of a new product
within the health care marketplace, and be subject, therefore, only
to those antitrust prohibitions applicable to the conduct of other
presumptively legitimate enterprises.
   This section does not change existing antitrust law as it relates
to any agreement or arrangement to exclude from any of the
above-described groups or combinations, any person who is lawfully
qualified to perform the services to be performed by the members of
the group or combination, where the ground for the exclusion is
failure to possess the same license or certification as is possessed
by the members of the group or combination.

1342.7.  (a) The Legislature finds that in enacting Sections
1367.215, 1367.25, 1367.45, 1367.51, and 1374.72, it did not intend
to limit the department's authority to regulate the provision of
medically necessary prescription drug benefits by a health care
service plan to the extent that the plan provides coverage for those
benefits.
   (b) (1) Nothing in this chapter shall preclude a plan from filing
relevant information with the department pursuant to Section 1352 to
seek the approval of a copayment, deductible, limitation, or
exclusion to a plan's prescription drug benefits. If the department
approves an exclusion to a plan's prescription drug benefits, the
exclusion shall not be subject to review through the independent
medical review process pursuant to Section 1374.30 on the grounds of
medical necessity. The department shall retain its role in assessing
whether issues are related to coverage or medical necessity pursuant
to paragraph (2) of subdivision (d) of Section 1374.30.
   (2) A plan seeking approval of a copayment or deductible may file
an amendment pursuant to Section 1352.1. A plan seeking approval of a
limitation or exclusion shall file a material modification pursuant
to subdivision (b) of Section 1352.
   (c) Nothing in this chapter shall prohibit a plan from charging a
subscriber or enrollee a copayment or deductible for a prescription
drug benefit or from setting forth by contract, a limitation or an
exclusion from, coverage of prescription drug benefits, if the
copayment, deductible, limitation, or exclusion is reported to, and
found unobjectionable by, the director and disclosed to the
subscriber or enrollee pursuant to the provisions of Section 1363.
   (d) The department in developing standards for the approval of a
copayment, deductible, limitation, or exclusion to a plan's
prescription drug benefits, shall consider alternative benefit
designs, including, but not limited to, the following:
   (1) Different out-of-pocket costs for consumers, including
copayments and deductibles.
   (2) Different limitations, including caps on benefits.
   (3) Use of exclusions from coverage of prescription drugs to treat
various conditions, including the effect of the exclusions on the
plan's ability to provide basic health care services, the amount of
subscriber or enrollee premiums, and the amount of out-of-pocket
costs for an enrollee.
   (4) Different packages negotiated between purchasers and plans.
   (5) Different tiered pharmacy benefits, including the use of
generic prescription drugs.
   (6) Current and past practices.
   (e) The department shall develop a regulation outlining the
standards to be used in reviewing a plan's request for approval of
its proposed copayment, deductible, limitation, or exclusion on its
prescription drug benefits.
   (f) Nothing in subdivision (b) or (c) shall permit a plan to limit
prescription drug benefits provided in a manner that is inconsistent
with Sections 1367.215, 1367.25, 1367.45, 1367.51, and 1374.72.
   (g) Nothing in this section shall be construed to require or
authorize a plan that contracts with the State Department of Health
Services to provide services to Medi-Cal beneficiaries or with the
Managed Risk Medical Insurance Board to provide services to enrollees
of the Healthy Families Program to provide coverage for prescription
drugs that are not required pursuant to those programs or contracts,
or to limit or exclude any prescription drugs that are required by
those programs or contracts.
   (h) Nothing in this section shall be construed as prohibiting or
otherwise affecting a plan contract that does not cover outpatient
prescription drugs except for coverage for limited classes of
prescription drugs because they are integral to treatments covered as
basic health care services, including, but not limited to,
immunosuppressives, in order to allow for transplants of bodily
organs.
   (i) (1) The department shall periodically review its regulations
developed pursuant to this section.
   (2) On or before July 1, 2004, and annually thereafter, the
department shall report to the Legislature on the ongoing
implementation of this section.
   (j) This section shall become operative on January 2, 2003, and
shall only apply to contracts issued, amended, or renewed on or after
that date.

1342.8.  The State Department of Health Services and the department
shall coordinate, to the extent feasible, audits or surveys of
physician offices required by this chapter and by the managed care
program under the Medi-Cal Act (Chapter 7 (commencing with Section
14000) of Part 3 of Division 9 of the Welfare and Institutions Code)
and for any physician office auditing required by this chapter.

1343.  (a) This chapter shall apply to health care service plans and
specialized health care service plan contracts as defined in
subdivisions (f) and (o) of Section 1345.
   (b) The director may by the adoption of rules or the issuance of
orders deemed necessary and appropriate, either unconditionally or
upon specified terms and conditions or for specified periods, exempt
from this chapter any class of persons or plan contracts if the
director finds the action to be in the public interest and not
detrimental to the protection of subscribers, enrollees, or persons
regulated under this chapter, and that the regulation of the persons
or plan contracts is not essential to the purposes of this chapter.
   (c) The director, upon request of the Director of Health Care
Services, shall exempt from this chapter any county-operated pilot
program contracting with the State Department of Health Care Services
pursuant to Article 7 (commencing with Section 14490) of Chapter 8
of Part 3 of Division 9 of the Welfare and Institutions Code. The
director may exempt noncounty-operated pilot programs upon request of
the Director of Health Care Services. Those exemptions may be
subject to conditions the Director of Health Care Services deems
appropriate.
   (d) Upon the request of the Director of Mental Health, the
director may exempt from this chapter any mental health plan
contractor or any capitated rate contract under Part 2.5 (commencing
with Section 5775) of Division 5 of the Welfare and Institutions
Code. Those exemptions may be subject to conditions the Director of
Mental Health deems appropriate.
   (e) This chapter shall not apply to:
   (1) A person organized and operating pursuant to a certificate
issued by the Insurance Commissioner unless the entity is directly
providing the health care service through those entity-owned or
contracting health facilities and providers, in which case this
chapter shall apply to the insurer's plan and to the insurer.
   (2) A plan directly operated by a bona fide public or private
institution of higher learning which directly provides health care
services only to its students, faculty, staff, administration, and
their respective dependents.
   (3) A person who does all of the following:
   (A) Promises to provide care for life or for more than one year in
return for a transfer of consideration from, or on behalf of, a
person 60 years of age or older.
   (B) Has obtained a written license pursuant to Chapter 2
(commencing with Section 1250) or Chapter 3.2 (commencing with
Section 1569).
   (C) Has obtained a certificate of authority from the State
Department of Social Services.
   (4) The Major Risk Medical Insurance Board when engaging in
activities under Chapter 8 (commencing with Section 10700) of Part 2
of Division 2 of the Insurance Code, Part 6.3 (commencing with
Section 12695) of Division 2 of the Insurance Code, and Part 6.5
(commencing with Section 12700) of Division 2 of the Insurance Code.
   (5) The California Small Group Reinsurance Fund.

1343.1.  This chapter shall not apply to any program developed under
the authority of Chapter 8.75 (commencing with Section 14590) of
Part 3 of Division 9 of the Welfare and Institutions Code.

1343.5.  In any proceeding under this chapter, the burden of proving
an exemption or an exception from a definition is upon the person
claiming it.

1344.  (a) The director may from time to time adopt, amend, and
rescind any rules, forms, and orders that are necessary to carry out
the provisions of this chapter, including rules governing
applications and reports, and defining any terms, whether or not used
in this chapter, insofar as the definitions are not inconsistent
with the provisions of this chapter. For the purpose of rules and
forms, the director may classify persons and matters within the
director's jurisdiction, and may prescribe different requirements for
different classes. The director may waive any requirement of any
rule or form in situations where in the director's discretion that
requirement is not necessary in the public interest or for the
protection of the public, subscribers, enrollees, or persons or plans
subject to this chapter. The director may adopt rules consistent
with federal regulations and statutes to regulate health care
coverage supplementing Medicare.
   (b) The director may, by regulation, modify the wording of any
notice required by this chapter for purposes of clarity, readability,
and accuracy, except that a modification shall not change the
substantive meaning of the notice.
   (c) The director may honor requests from interested parties for
interpretive opinions.
   (d) No provision of this chapter imposing any liability applies to
any act done or omitted in good faith in conformity with any rule,
form, order, or written interpretive opinion of the director, or any
opinion of the Attorney General, notwithstanding that the rule, form,
order, or written interpretive opinion may later be amended or
rescinded or be determined by judicial or other authority to be
invalid for any reason.

1345.  As used in this chapter:
   (a) "Advertisement" means any written or printed communication or
any communication by means of recorded telephone messages or by
radio, television, or similar communications media, published in
connection with the offer or sale of plan contracts.
   (b) "Basic health care services" means all of the following:
   (1) Physician services, including consultation and referral.
   (2) Hospital inpatient services and ambulatory care services.
   (3) Diagnostic laboratory and diagnostic and therapeutic
radiologic services.
   (4) Home health services.
   (5) Preventive health services.
   (6) Emergency health care services, including ambulance and
ambulance transport services and out-of-area coverage. "Basic health
care services" includes ambulance and ambulance transport services
provided through the "911" emergency response system.
   (7) Hospice care pursuant to Section 1368.2.
   (c) "Enrollee" means a person who is enrolled in a plan and who is
a recipient of services from the plan.
   (d) "Evidence of coverage" means any certificate, agreement,
contract, brochure, or letter of entitlement issued to a subscriber
or enrollee setting forth the coverage to which the subscriber or
enrollee is entitled.
   (e) "Group contract" means a contract which by its terms limits
the eligibility of subscribers and enrollees to a specified group.
   (f) "Health care service plan" or "specialized health care service
plan" means either of the following:
   (1) Any person who undertakes to arrange for the provision of
health care services to subscribers or enrollees, or to pay for or to
reimburse any part of the cost for those services, in return for a
prepaid or periodic charge paid by or on behalf of the subscribers or
enrollees.
   (2) Any person, whether located within or outside of this state,
who solicits or contracts with a subscriber or enrollee in this state
to pay for or reimburse any part of the cost of, or who undertakes
to arrange or arranges for, the provision of health care services
that are to be provided wholly or in part in a foreign country in
return for a prepaid or periodic charge paid by or on behalf of the
subscriber or enrollee.
   (g) "License" means, and "licensed" refers to, a license as a plan
pursuant to Section 1353.
   (h) "Out-of-area coverage," for purposes of paragraph (6) of
subdivision (b), means coverage while an enrollee is anywhere outside
the service area of the plan, and shall also include coverage for
urgently needed services to prevent serious deterioration of an
enrollee's health resulting from unforeseen illness or injury for
which treatment cannot be delayed until the enrollee returns to the
plan's service area.
   (i) "Provider" means any professional person, organization, health
facility, or other person or institution licensed by the state to
deliver or furnish health care services.
   (j) "Person" means any person, individual, firm, association,
organization, partnership, business trust, foundation, labor
organization, corporation, limited liability company, public agency,
or political subdivision of the state.
   (k) "Service area" means a geographical area designated by the
plan within which a plan shall provide health care services.
   ( l) "Solicitation" means any presentation or advertising
conducted by, or on behalf of, a plan, where information regarding
the plan, or services offered and charges therefor, is disseminated
for the purpose of inducing persons to subscribe to, or enroll in,
the plan.
   (m) "Solicitor" means any person who engages in the acts defined
in subdivision ( l).
   (n) "Solicitor firm" means any person, other than a plan, who
through one or more solicitors engages in the acts defined in
subdivision ( l).
   (o) "Specialized health care service plan contract" means a
contract for health care services in a single specialized area of
health care, including dental care, for subscribers or enrollees, or
which pays for or which reimburses any part of the cost for those
services, in return for a prepaid or periodic charge paid by or on
behalf of the subscribers or enrollees.
   (p) "Subscriber" means the person who is responsible for payment
to a plan or whose employment or other status, except for family
dependency, is the basis for eligibility for membership in the plan.
   (q) Unless the context indicates otherwise, "plan" refers to
health care service plans and specialized health care service plans.
   (r) "Plan contract" means a contract between a plan and its
subscribers or enrollees or a person contracting on their behalf
pursuant to which health care services, including basic health care
services, are furnished; and unless the context otherwise indicates
it includes specialized health care service plan contracts; and
unless the context otherwise indicates it includes group contracts.
   (s) All references in this chapter to financial statements,
assets, liabilities, and other accounting items mean those financial
statements and accounting items prepared or determined in accordance
with generally accepted accounting principles, and fairly presenting
the matters which they purport to present, subject to any specific
requirement imposed by this chapter or by the director.