Who is impacted?

In early September, Health Net announced it will exit the commercial employer-group insurance market in California and Oregon, with existing coverage ending in early 2027. This decision impacts all small- and large-group medical plans, including groups enrolled through CaliforniaChoice.

In-force group coverage is set to end on Feb. 28, 2027, although Health Net will continue processing claims and providing customer service during the transition.

What happens now?

The withdrawal will require employers using Health Net to select new group coverage for their workers. Work with your broker to consider replacement plans that include comparable provider networks, prescription drug benefits, and more.

Key dates to know:

September

  • Work with your broker now to confirm that your group coverage terminates on February 28, 2027, and know what your last available renewal date is. (Bonus tip: If you renew on January 1, 2027, you’re only buying 58 days' worth of coverage, and you will be behind other companies in the search for a new plan.) Put that information somewhere your finance and HR teams can find because every decision you make after today depends on it.

  • Run an employee population poll to understand how many employees and dependents are already enrolled and list anyone in active treatment, mid-course on a specialty drug, pregnant, or scheduled for a procedure in early 2027. These cases will drive your network decision much more than any rate quotes – and the things that will generate more calls to your HR leader.

October

  • Work with your broker to start shopping for your new plan. Employers in California that are impacted by this news will also be shopping at this time, putting pressure on the state’s underwriting capacity. Early submissions get the best options, with February submissions getting what’s left over.

November – December

  • Rank the replacement plans you are considering against the physicians and hospitals your employees actually use. Ask what continuity-of-care provisions are offered by the new carrier for those employees who are mid-treatment.

  • Remember, it’s always more expensive to lose a winning team than to spend a few extra dollars on benefits that help retain your top talent.

  • Explain it twice: Your employees will hear that their insurance company is going out of business, and it’s worth making the correction. Health Net is simply leaving one line of business, and your employees’ coverage is being replaced. Give them the date and the plan details, then tell them again 30 days before the change.

In brief, ending February 28, 2027:

  • Small group medical
  • Large group medical
  • HMO, PPO, and POS plan
  • All in-force group policies, regardless of plan year.

For more information, connect with our Employee Benefits advisors at everyonebenefits@venbrook.com.