CA Gov't Code Section 19816.18

(a)

The department may either self-fund or self-insure any benefit program under its administration when it is cost-effective to do so. The department may administer the self-funded or self-insured benefit program directly or may contract with a third party administrator. The Treasurer, Controller, and the Department of Finance shall assist the department to ensure that the appropriate fiscal and administrative procedures are established. These procedures shall include, but not be limited to, processes, fund accounts, and transfers from each department’s operating budget, including a pro rata share of the cost of administration.

(b)

Funds appropriated for self-funded or self-insured benefit programs established pursuant to this section shall be maintained in the State Employees’ Self-Funded Benefit Fund, which is hereby created in the State Treasury. Moneys in this fund shall be used by the department to make benefit payments and pay related administrative costs. Income of whatever nature earned on the moneys in the State Employees’ Self-Funded Benefit Fund during any fiscal year shall be credited to the fund. The Controller and the Department of Finance may establish individual accounts within the fund, as deemed appropriate, for individual self-funded or self-insured benefit programs. Notwithstanding Section 13340, moneys in this fund and accounts within the fund that are used to pay benefits for a self-funded or self-insured program established pursuant to this section are continuously appropriated, without regard to fiscal years.