Health & Saf. Code, § 131511

(a) In implementing the pilot program established pursuant to this division, the local initiative in Santa Clara County shall not be subject to the requirements of subdivision (a) of Section 1357.03. The program shall be otherwise subject to the requirements of Chapter 2.2 (commencing with Section 1340) of Division 2, including Article 3.1 (commencing with Section 1357) thereof, except as otherwise provided in this division, and shall be subject to approval as to regulatory filings with the Department of Managed Health Care as prescribed in Chapter 2.2 (commencing with Section 1340) of Division 2 and in implementing regulations promulgated by the department.

(b) Except in the case of a late enrollee or for satisfaction of a preexisting condition clause in the case of initial coverage for an eligible employee, the local initiative may not exclude any eligible employee who would otherwise be eligible for health care coverage under this division on the basis of an actual or expected health care condition. The local initiative may not limit or exclude coverage for any eligible employee by type of illness, treatment, medical condition, or accident, except for preexisting conditions as permitted under Section 1357.06.

(c) Coverage provided through the program to an eligible small business shall be renewable with respect to all eligible employees at the option of the participating small business.