California Code, Education Code - EDC § 89507

(a) The trustees, subject to any conditions which the trustees may impose, may establish programs of insurance with respect to any class of employees of the trustees which the trustees may designate or with respect to all of the employees of the trustees, with any insurer or insurers, insurance broker or brokers, or insurance agent or agents, the trustees may select, provided that all applicable provisions of the Insurance Code relating to the insurance, or to the qualifications of the insurer, broker, or agent, are satisfied. The premiums of the programs of insurance shall be borne by the employees, employer, or employees and employer participating therein.

(b) If the provisions of this section are in conflict with the provisions of a memorandum of understanding reached pursuant to Chapter 12 (commencing with Section 3560) of Division 4 of Title 1 of the Government Code, the memorandum of understanding shall be controlling without further legislative action, except that if the provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.