If your business provides health coverage to employees through Health Net, there's an important change on the horizon that requires your attention now, not later.

Health Net has announced it will exit the small group and large group health insurance market in California, effective March 1, 2027. This means any employer group currently covered under a Health Net small group or large group plan will need to transition to a new carrier before that date.

Below, we break down what's happening, who's affected, and, most importantly, what you should be doing right now to prepare.

What's Changing

Effective 3/1/27, Health Net will no longer offer small group or large group commercial health plans in California. This applies to:

• Small group plans (typically 1 to 100 employees)
• Large group plans (101+ employees)

If your business currently holds one of these plans, your coverage will not continue past the effective date. You will need to secure a new carrier and plan before your group's coverage with Health Net ends.

Who Is Affected

Any California employer, small or large, currently enrolled in a Health Net small group or large group health plan. If you're unsure whether your plan falls into this category, your broker or HR team can confirm this by checking your current policy documents.

Individual and family plans, Medi-Cal, and Medicare plans are separate lines of business and are not addressed by this announcement. This change is specific to the employer-sponsored group market.

Why This Matters for Your Business

A carrier exit isn't just an administrative footnote. It has real implications for your business and your employees:

• Coverage continuity: Without proactive planning, there's a risk of a gap in coverage for your employees.
• Renewal timing: Depending on when your group's plan renews, you may need to make carrier decisions well before the March 2027 deadline.
• Employee communication: Your team will have questions, and clear, early communication can prevent confusion and anxiety.
• Plan comparison: Moving carriers is an opportunity to reassess whether your current plan design, network, and pricing still make sense for your workforce, but that comparison takes time to do well.

When Should You Move?

Timing matters, and we recommend planning your transition around your renewal date:

• If your renewal date falls before January 1st, we recommend moving to your new carrier at that renewal.
• If your renewal date falls after January 1st, we recommend moving on January 1st instead.

Why January 1st? Starting your new plan at the beginning of the calendar year means your deductibles and out-of-pocket maximums reset cleanly with the plan year, rather than employees having to track two different accumulation periods across a partial year with two different carriers. If we find out that other insurance companies will honor deductibles and out of pockets from Health Net to move sooner though, we will let you know. In this case, we may recommend you to move sooner.

What You Should Do Now

The deadline may feel far off, but the smart move is to start early rather than wait until the final months before 3/1/27. Here's a simple roadmap:

1. Confirm your current plan details. Know your renewal date, plan type, and enrollment numbers.
2. Start exploring alternative carriers. California's group market includes several strong options, and this is a good time to compare pricing, networks, and benefits.
3. Decide on your target transition date. Use the renewal timing guidance above to determine whether your move should happen at your next renewal or on January 1st.
4. Loop in your employees early. Once you have a transition plan, communicate it clearly so employees aren't caught off guard.
5. Work with a broker who can manage the process for you. A knowledgeable broker can handle carrier comparisons, paperwork, and timing so you can stay focused on running your business.

The Bottom Line

Health Net's exit from California's group health insurance market is a significant shift, but it's one you have time to plan for. Employers who start early will have the smoothest transition: more carrier options, more time to compare plans, and less last-minute pressure.

If your business currently has group coverage through Health Net, now is the time to start the conversation about your next steps. Reach out to our team, and we'll help you evaluate your options and build a transition plan that works for your business and your employees.