California Code of Regulations
Title 10 - Investment
Chapter 5.7 - Voluntary Alliance Uniting Employers Purchasing Pool (the Health Insurance Plan of California)
Article 2 - Participation Requirements, Application and Enrollment
Section 2699.6131 - Initial Sole Employer Qualification and Sole Employee Enrollment Period

(a) Upon receipt of a complete application, the program shall determine the sole employer's qualification for the program, determine the eligibility of each of the sole employer's employees that apply for coverage, and determine whether each person for whom coverage as a dependent has been requested is a dependent. The program may rely upon the application to determine the sole employer's qualification; this determination shall be made within ten calendar days of receipt of the complete application.

(b) Sole employers determined not qualified for the program will be notified in writing by the program. The notice shall include the reason for the determination of disqualification and an explanation of the appeal process. The sole employer's initial premium shall be refunded.

(c) If an employee of a qualified sole employer is determined by the program not to be a sole employee as of the effective date of coverage, or if a person for whom coverage as a dependent has been requested is determined not to be a dependent, the sole employer shall be notified of the determination and the sole employer shall notify the employee. The notice shall include the reason for the determination of ineligibility and an explanation of the appeal process. The portion of the sole employer's initial premium covering amounts owed for coverage to persons found either to be ineligible or not a dependent shall be refunded.