ARTICLE 6. Conflict of Interest [14475. - 14482.]

Cal. Welfare and Institutions Code - WIC 6.

in effect

Cal. Welfare and Institutions Code - WIC § 14475. Section 14475.

(a) No prepaid health plan or pilot program contract shall be approved or renewed by the department pursuant to this chapter if any state officer or state employee or his spouse or minor child has a substantial financial interest, as defined by Section 14478, in any of the following: (1) The contract or the contracting organization. (2) Any contract with the contracting organization. (3) Procurement of a contract for the contracting organization. (b) As used in subdivision (a), “state officer or state employee” means any person included in Section 14477 and includes any employee in the department who has a direct responsibility for the negotiation, development, or management of a prepaid health plan contracted under the provisions of this chapter. The director shall publish regulations determining the class of employees covered by this subdivision.

Cal. Welfare and Institutions Code - WIC § 14476. Section 14476.

The chief executive, sole proprietor, or managing partner of each prepaid health plan shall file with the department an annual statement disclosing any purchases or leases of services, equipment, supplies or real property by the plan from any entity in which any of the following persons have a substantial financial interest as defined by Section 14478: (a) Any person also having a substantial financial interest in the plan. (b) Any director, officer, partner, trustee or employee of the plan. (c) Any member of the immediate family of any person designated in (a) or (b).

Cal. Welfare and Institutions Code - WIC § 14477. Section 14477.

(a) For purposes of this article, “state officer” means a United States Senator or Member of Congress representing California, the Governor, Lieutenant Governor, Secretary of State, Controller, Treasurer, Attorney General, State Superintendent of Public Instruction, a Member of the Legislature, or a secretary of a state agency. (b) For purposes of this article, “state employee” means any staff member of a state agency secretary who holds a policymaking position, any member of the Governor’s staff who holds a policymaking position, or any administrative aide or committee consultant of the Legislature. “State employee” includes the appointive or civil service employee of the highest class or grade in each department, system, program, section, or other administrative subdivision of the State Department of Health Services as defined in regulations adopted by the department.

Cal. Welfare and Institutions Code - WIC § 14478. Section 14478.

(a) As used in this chapter, “substantial financial interest” means the ownership of common stock, preferred stock, warrants, options, loans, partnership interests, debt instruments, or other ownership interest, if consisting of, or convertible to, equity investments in an entity contracting with the department under the provisions of this chapter or an entity contracting with a current or proposed contractor doing business with the department under the provisions of this chapter, and such ownership interest in terms of fair market value is not less than the greater of the following: (1) One thousand dollars ($1,000). (2) Five percent or more of the total fair market value of all equity investments in the entity, including ownership interests convertible to such investments. A convertible debt includes bonds, notes, debentures, and mortgages. (b) As used in this chapter, “immediate family” means an individual’s spouse and minor dependent children and any other person over which the individual has legal control.

Cal. Welfare and Institutions Code - WIC § 14479. Section 14479.

(a) No prepaid health plan or pilot program contract shall be approved, renewed or continued by the department if a state officer or state employee is employed in a management or consultant position by the contractor or a subcontractor to the contractor within one year after the state officer or state employee terminated state employment. (b) For purposes of this section, “state employee” means any appointive or civil service employee of the department or of the Health and Welfare Agency who, within two years prior to leaving state employment, was responsible for development, negotiation, contract management, or supervision of a prepaid health plan or prepaid health plan contract. For purposes of this section, employees of the department who are assigned as contract managers shall not be subject to the provisions of this section unless they are employed by a prepaid health plan or a subcontractor of a prepaid health plan for which, within two years prior to leaving state employment, they were responsible for the development, negotiation, contract management, or direct supervision over the prepaid health plan contract. This section shall not apply to any employee, appointee, or person on contract with the department who is employed, appointed, or contracted with by the department either: (1) To fulfill the purposes of a federal grant, provided that such person does not supervise, develop, manage, or negotiate a prepaid health plan contract; or (2) To fulfill on a temporary basis, not to exceed 120 days, a specific function for the department which does not include supervising, developing, managing, or negotiating a prepaid health plan contract. (c) The requirements of this section shall apply to any contract entered into on or after the operative date of this section and to any state officer or state employee who is employed by such contractor or subcontractor thereof on or after such operative date. This section shall not apply to any state officer or employee who terminated state employment prior to such operative date.

Cal. Welfare and Institutions Code - WIC § 14480. Section 14480.

No prepaid health plan or pilot program contract with an existing or proposed contractor shall be approved or renewed if a state officer or state employee provides legal or management services to the contracting organization. For the purposes of this section no state officer or state employee shall share in the income or any remuneration derived from the providing of legal or management services to a contracting organization.

Cal. Welfare and Institutions Code - WIC § 14481. Section 14481.

No prepaid health plan or pilot program contract shall be approved or renewed if any state officer or state employee receives anything of value for the purpose of influencing or attempting to influence the negotiations for approval or renewal of the contract.

Cal. Welfare and Institutions Code - WIC § 14482. Section 14482.

No prepaid health plan shall contract with any subcontractor other than the plan’s subsidiary corporation, its parent corporation, or another subsidiary of its parent corporation, or an affiliate of the prepaid health plan whose financial statements are consolidated with that of the prepaid health plan at the time of the annual audit by the independent auditors of the plan and when the quarterly and annual financial statements are filed with the Director of the Department of Managed Health Care, if any of the following persons connected with the plan have a substantial financial interest, as defined by Section 14478, in such subcontractor: (a) Any person also having a substantial financial interest in the plan. (b) Any director, officer, partner, trustee, or employee of the plan. (c) Any member of the immediate family of any person designated in (a) or (b).

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026