Skip to main content
Blue Ocean Benefits
California Employer Alert · September 2026

Health Net Is Exiting California Group Health Insurance—What Employers Should Do Now

Health Net is exiting California's traditional commercial Small Group and Large Group medical markets. Affected employer HMO, PPO and POS coverage ends February 28, 2027, or as otherwise permitted by contract or regulatory requirements. Coverage does not end immediately — but employers should begin evaluating options now.

Request a Health Net Transition ReviewCall (949) 394-2299

Confidential · Independent California brokerage · Not affiliated with Health Net

The short answer

What is happening, in one paragraph

Health Net is exiting California's traditional commercial Small Group and Large Group medical markets. Affected employer group products include HMO, PPO and POS coverage, and CalChoice groups are affected as well. Employer and broker notices began September 1, 2026, which was also the last new-business effective date. The final renewal effective date is February 1, 2027, subject to Health Net's formal guidelines and case-specific exceptions, and affected group coverage ends February 28, 2027, or as otherwise permitted by contract or regulatory requirements. This does not affect Medi-Cal, Marketplace/Covered California individual coverage or Medicare lines of business.

A short guide to the Health Net California group market exit and what employers should do next.

Key dates

The transition timeline

  1. September 1, 2026

    Employer and broker notices began.

  2. September 1, 2026

    Last new-business effective date for affected group medical plans.

  3. January 1, 2027

    Last effective date for new small groups joining CalChoice with Health Net membership. Special underwriting applies to 9/1/26–1/1/27 effective dates.

  4. February 1, 2027

    Final renewal effective date, subject to Health Net's formal guidelines and case-specific exceptions.

  5. February 28, 2027

    Final coverage date for affected group plans, or as otherwise permitted by contract or regulatory requirements.

CalChoice pathway

A CalChoice option for small groups

For employers with 1–100 employees, CaliforniaChoice is the one place Health Net remains available to new business — and it offers a simpler way in for Health Net direct groups.

  • Health Net is available to new CalChoice groups through January 1, 2027 effective dates
  • Renewing CalChoice Health Net members receive a full 12-month plan cycle
  • At the following renewal, members move to one of the six remaining CalChoice health plans — and can often keep their current doctor, hospital or network
  • Multiple carriers and plan designs on one program with one consolidated bill
  • Special underwriting for 9/1/26–1/1/27 effective dates: groups with one or more medically enrolled subscribers may submit their most recent Health Net invoice in place of a DE 9C. Standard CalChoice eligibility applies.

CalChoice is one pathway, not the only one. Blue Ocean compares it side by side with direct-carrier options so the decision is made on networks, rates and timing — not on which door is open.

Who is affected

  • California traditional commercial Small Group medical coverage
  • California traditional commercial Large Group medical coverage
  • Employer group HMO, PPO and POS medical plans
  • CalChoice groups — with a longer runway: Health Net stays available through a January 1, 2027 renewal, then a full 12-month plan cycle

CalChoice groups keep Health Net through their January 1, 2027 renewal and the full 12-month plan year that follows. At the next renewal, members choose another plan from CalChoice's remaining carriers.

Who is not affected

  • Medi-Cal
  • Marketplace / Covered California individual coverage
  • Medicare lines of business

Health Net is not leaving every California market — only the traditional commercial employer group medical market is affected.

Plan the change

What employers should evaluate now

A replacement plan is more than a premium. These are the factors that determine whether a transition lands well for employees.

  • Available California carrier options for your group size and locations
  • Rates and total employer cost at the new effective date
  • Provider and hospital network match for your employee population
  • Prescription coverage and formulary differences
  • Active prior authorizations that may need to be re-established
  • Ongoing treatment and continuity-of-care considerations
  • Plan design — deductibles, copays, out-of-pocket maximums, embedded benefits
  • Employer and employee contribution structure
  • Enrollment timing relative to your renewal and the final coverage date
  • Employee communications and payroll-deduction updates
The process

A practical four-step transition

Identify whether your medical plan is one of the affected California group products, and confirm your current renewal and coverage dates in writing.

Review available California carriers for your group size and locations — rates, networks, formularies and plan designs compared side by side against what employees have today.

Select the plan lineup and model employer and employee contributions so leadership can see the budget impact before anything is communicated.

Coordinate effective dates with the end of Health Net coverage, complete carrier implementation and enrollment, brief employees, and confirm payroll deductions are accurate on the first affected payroll.
Why Blue Ocean

Independent help through the transition

  • Independent, non-captive review across available California carriers
  • More than 20 years across payroll, HCM technology and employee benefits
  • Provider and hospital network comparison against your employee population
  • Employer and employee contribution modeling
  • Employee communications and open enrollment support
  • Carrier implementation and payroll-deduction accuracy
Kim Trowbridge, founder of Blue Ocean Benefits
Reviewed by Kim Trowbridge

Kim Trowbridge has more than 20 years of experience across payroll, HCM technology and employee benefits. He founded Blue Ocean Insurance Agency in 2007 after helping build and operate a California payroll company. That combined experience allows Blue Ocean to manage a carrier transition end to end — plan comparison, contribution modeling, employee communications, carrier implementation and payroll deduction accuracy.

California Insurance License #0G66561

Last reviewed: September 9, 2026

Health Net exit FAQ

Straight answers for California employers.

Not entirely. Health Net is exiting California's traditional commercial Small Group and Large Group medical markets. It is not exiting Medi-Cal, Marketplace/Covered California individual coverage or Medicare lines of business.

Traditional commercial employer group medical coverage in California — including HMO, PPO and POS plans. CalChoice groups are affected too, but on a longer timeline: Health Net remains available through a January 1, 2027 renewal with a full 12-month plan cycle, and CalChoice is accepting new small groups with Health Net membership through January 1, 2027 effective dates.

CaliforniaChoice is a private small group exchange (1–100 employees) with multiple carriers on one bill. Health Net direct groups can move into CalChoice with a 9/1/26 through 1/1/27 effective date and keep Health Net for that plan year, then choose another CalChoice carrier at the following renewal. For those effective dates CalChoice offers special underwriting: a recent Health Net invoice can be submitted in place of a DE 9C. Blue Ocean can quote Health Net through CalChoice and compare it against direct-carrier options.

Notices to employers and brokers began September 1, 2026, which was also the last new-business effective date. The final renewal effective date is February 1, 2027, subject to Health Net's formal guidelines and case-specific exceptions, and affected group coverage ends February 28, 2027, or as otherwise permitted by contract or regulatory requirements.

No. The announced exit applies to the traditional commercial employer group medical market. Medi-Cal, Marketplace/Covered California individual coverage and Medicare lines of business are not part of this change.

Waiting is generally not necessary. Coverage does not end immediately, but comparing carriers, networks and plan designs early gives an employer more time to evaluate options, check continuity of care for employees in treatment, and communicate changes before the transition date.

Provider and hospital networks, prescription formularies, active prior authorizations, continuity of care for ongoing treatment, plan design, employer and employee contributions, enrollment timing, employee communications and payroll-deduction accuracy. A plan that is cheaper but disrupts care can cost more in practice.

Yes. Blue Ocean Benefits is an independent California brokerage and regularly reviews options for employers whose coverage is placed elsewhere. A review carries no obligation, and any change of broker of record is the employer's decision.

Sources

Blue Ocean Benefits is an independent California employee benefits brokerage and is not affiliated with Health Net. Dates and product details reflect information available as of September 2026 and are subject to Health Net's formal guidelines, case-specific exceptions and applicable regulatory requirements. This page is general information for employers, not legal or tax advice.

Confidential request

Request a Health Net Transition Review

Independent California analysis of your alternatives — carriers, rates, provider networks, plan design and transition timing.

After you submit this form, we'll request supporting plan and renewal documents through a secure channel. By submitting, you agree to be contacted by Blue Ocean Benefits. See our privacy policy.

Go deeper on the transition

Affected group coverage ends February 28, 2027 unless your contract says otherwise. These cover the decisions that follow from that.

Related California employer resources