The prepaid health plan shall enroll only those Medi-Cal beneficiaries who reside within the contract service area. Prepaid health plans shall use a standard application form prescribed by the department which is readily understandable to the enrollees. A beneficiary shall be enrolled in the prepaid health plan when the beneficiary voluntarily signs the enrollment application agreeing to utilize the health services provided by the prepaid plan and his eligibility for enrollment in that plan is verified by validation of the application by the department.
Notwithstanding the provisions of this section requiring voluntary enrollment, the department may approve the transfer of the enrollees of one or more prepaid health plans to another prepaid health plan in accordance with the terms of a merger or reorganization approved by the department pursuant to the conditions set forth in Sections 14303.1 and 14303.2.