Is Health Net leaving California?

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.

Which Health Net employer plans are affected?

Traditional commercial employer group medical coverage in California — including HMO, PPO and POS plans. CalChoice groups are also affected, and CalChoice-specific transition guidance is still pending.

Does the exit affect Covered California, Medi-Cal or Medicare?

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.

Should an employer wait until its renewal to compare alternatives?

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.

What should employers compare besides price?

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.

Can Blue Ocean help if it is not the current broker?

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.

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 Review Call (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.

Key dates

The transition timeline

September 1, 2026
Employer and broker notices began.
September 1, 2026
Last new-business effective date for affected group medical plans.
February 1, 2027
Final renewal effective date, subject to Health Net's formal guidelines and case-specific exceptions.
February 28, 2027
Final coverage date for affected group plans, or as otherwise permitted by contract or regulatory requirements.

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 — CalChoice-specific transition guidance is still pending

CalChoice groups are affected, and additional CalChoice-specific transition guidance is still pending.

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

1. Confirm your situation

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

2. Market and compare

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.

3. Decide and model contributions

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

4. Implement and communicate

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

Reviewed by Kim Trowbridge

Kim Trowbridge has more than 20 years of experience across payroll, HCM technology and employee benefits. She 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 2026

Health Net exit FAQ

Straight answers for California employers.

Is Health Net leaving California?: 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.
Which Health Net employer plans are affected?: Traditional commercial employer group medical coverage in California — including HMO, PPO and POS plans. CalChoice groups are also affected, and CalChoice-specific transition guidance is still pending.
When does affected Health Net group coverage end?: 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.
Does the exit affect Covered California, Medi-Cal or Medicare?: 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.
Should an employer wait until its renewal to compare alternatives?: 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.
What should employers compare besides price?: 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.
Can Blue Ocean help if it is not the current broker?: 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.