(a) To the extent permitted by PPACA, a carrier shall not be required by the provisions of this chapter to do any of the following:

1. (1) Offer coverage to, or accept applications from, a small employer where the small employer is seeking coverage for eligible employees and dependents who do not live, work, or reside in a carrier’s service areas.

2. (2)

   1. (A) Offer coverage to, or accept applications from, a small employer for a benefits plan design within an area if the commissioner has found all of the following:

      1. (i) The carrier will not have the capacity within the area in its network of providers to deliver service adequately to the eligible employees and dependents of that employee because of its obligations to existing group contractholders and enrollees.
      2. (ii) The carrier is applying this paragraph uniformly to all employers without regard to the claims experience of those employers, and their employees and dependents, or any health status-related factor relating to those employees and dependents.
      3. (iii) The action is not unreasonable or clearly inconsistent with the intent of this chapter.

   2. (B) A carrier that cannot offer coverage to small employers in a specific service area because it is lacking sufficient capacity as described in this paragraph may not offer coverage in the applicable area to new employer groups until the later of the following dates:

      1. (i) The 181st day after the date that coverage is denied pursuant to this paragraph.
      2. (ii) The date the carrier notifies the commissioner that it has regained capacity to deliver services to small employers, and certifies to the commissioner that from the date of the notice it will enroll all small groups requesting coverage from the carrier until the carrier has met the requirements of subdivision (g) of Section 10753.05.
   3. (C) Subparagraph (B) shall not limit the carrier’s ability to renew coverage already in force or relieve the carrier of the responsibility to renew that coverage as described in Sections 10273.4 and 10753.13.
   4. (D) Coverage offered within a service area after the period specified in subparagraph (B) shall be subject to the requirements of this section.