Gov. Code, § 22953

(a) The state, through the Department of Human Resources, the Trustees of the California State University, or the Regents of the University of California may contract, upon negotiations with employee organizations, with carriers for dental care plans for employees, annuitants, and eligible family members, provided the carriers have operated successfully in the area of dental care benefits for a reasonable period or have a contract to provide a health benefit plan pursuant to Section 22850. The dental care plans may include a portion of the monthly premium to be paid by the employee or annuitant. Dental care plans provided under this authority may be self-funded by the employer if it is determined to be cost effective.

(b) An employee or annuitant may enroll in a dental care plan provided by a carrier that also provides a health benefit plan pursuant to Section 22850 if the employee or annuitant is also enrolled in the health benefit plan provided by that carrier. However, nothing in this section may be construed to require an employee or annuitant to enroll in a dental care plan and a health benefit plan provided by the same carrier.

(c) No contract for a dental care plan may be entered into unless funds are appropriated by the Legislature in a subsequently enacted statute. If a dental care plan is self-funded, funds used for that plan shall be considered continuously appropriated, notwithstanding Section 13340.

(d) Any contract entered into pursuant to this section may provide for a claims fund reserve account to be maintained with respect to the benefit program for the purpose of administering benefit programs, including, but not limited to, deducting contracted benefit program expenses. The account may also be used to defray increases in future premiums, reduce contributions of employees, annuitants, and employers, to implement cost containment programs, or to increase benefits provided by a benefit plan.

(e) An account established pursuant to subdivision (d) may be created outside of the centralized State Treasury System utilizing the taxpayer identification number of a contracted carrier, subject to the following provisions:

(1) Funds deposited under the carrier’s tax identification number and any interest earned from those funds remain the property of the state, subject to all applicable laws, policies, and fiscal controls.

(2) Any funds remaining in the account after the term of the contract are returned to the state.

(3) Any funds shall be used solely for the purpose of benefit programs.

(4) Deposited funds are segregated and clearly identifiable

(5) The carrier shall, upon request from the department, provide to the department account information, including the account number, account opening date, account closing date, account balance, and account transactions.

(6) The funds shall be insured by the carrier under any law of the United States or the carrier shall provide security for the funds in any of the forms specified in Section 16522 or 16612.