Health Net Is Ending California Group Health Plans in 2027: Employer Transition Guide

Updated September 2, 2026: Health Net has announced that it will exit California’s commercial group line of business. According to Health Net’s external broker FAQ, affected commercial group policies are expected to end February 28, 2027, or as otherwise permitted by the applicable contract and regulatory requirements. Each employer will receive its own formal notice and specific sunset date.

This is not an announcement that Health Net is leaving California entirely. It concerns employer-sponsored commercial group coverage. The broker FAQ says Health Net life insurance policies are not affected. Health Net’s Medicare, Medi-Cal, and individual or Covered California business should not be confused with this group-market transition.

Which Health Net employer plans are included?

The broker FAQ identifies small-group and large-group medical plans, dental, vision, standalone dental, standalone vision, and Employer Group Waiver Plans (EGWPs). Health Net says separate communications will follow for dental, vision, and EGWP coverage.

Employers should not assume that every benefit has the same termination date. The formal Health Net notice, policy documents, and subsequent product-specific communications control.

What California employers should do now

1. Save the formal notice. Record the group’s stated termination date, renewal date, contract number, and notice requirements.
2. Build an accurate employee census. Include eligible employees, dependents, home ZIP codes, coverage tiers, COBRA or Cal-COBRA participants, and anyone in a waiting period.
3. Gather the current plan documents. Keep the latest invoice, benefit summaries, provider network names, prescription formulary, and employer contribution schedule.
4. Identify continuity risks. Ask employees to privately report essential doctors, medical groups, hospitals, ongoing treatment, scheduled procedures, prescriptions, specialty medications, and existing prior authorizations through an appropriate secure process.
5. Compare replacement plans before canceling. Confirm the new carrier’s approval, effective date, first payment, network, and employee enrollment before terminating the Health Net policy.

Skyline Benefit’s secure group-health census process can help organize the quoting information. Do not send medical details in an ordinary census spreadsheet or unsecured email.

January 1 or March 1? Compare the total transition cost

A February 28 termination creates an unusual midyear decision. Some calendar-year groups may consider moving on January 1, 2027, instead of renewing briefly and moving again on March 1. There is no universally correct answer.

A March 1 replacement could cause employees to start new deductibles and out-of-pocket maximums after already accumulating expenses under Health Net in January and February. Accumulators may not transfer automatically. A January 1 move may avoid that two-month reset risk, but the employer must also compare premiums, networks, plan designs, implementation time, and any renewal or termination provisions.

Ask each proposed carrier in writing whether it will credit deductible or out-of-pocket accumulations and what documentation is required. Do not describe an accumulator credit as guaranteed until the replacement carrier confirms it.

Protect doctors, ongoing treatment, and prescriptions

Provider participation varies by the exact carrier, product, network, medical group, county, and effective date. A provider appearing in a broad directory is not enough; verify the specific proposed plan.

California’s Department of Managed Health Care explains that some members changing employer plans may qualify for continuity of care when a treating doctor, medical group, or hospital is not in the new network. Eligibility depends on the medical condition and other requirements, and the member must request it from the new plan.

Existing Health Net prior authorizations may not transfer. Members should retain copies and share them promptly with their providers and the replacement carrier. They should also verify formulary status, prior authorization, step therapy, quantity limits, specialty-pharmacy requirements, and refill timing for every ongoing prescription.

Include COBRA and Cal-COBRA participants

Do not leave continuation participants out of the transition. The U.S. Department of Labor states that plan changes applying to similarly situated active employees also apply to COBRA participants. Employers should coordinate with their COBRA administrator and obtain qualified compliance guidance for required notices and administration.

If an individual loses qualifying employer coverage, Covered California generally provides a special-enrollment window. Covered California explains that people anticipating a loss of job-based coverage may apply during the 60 days before or after the loss. Eligibility, financial assistance, and effective dates depend on the person’s circumstances. The employer’s replacement group plan—not individual coverage—will normally be the primary transition path for eligible active employees.

A practical transition timeline

• After the Health Net notice arrives: verify the exact end date and termination provisions; inventory medical, dental, vision, life, and EGWP arrangements separately.
• During replacement-plan review: compare premiums, employer contributions, networks, drugs, funding arrangements, service areas, and employee plan choice.
• Before enrollment: communicate what is changing, what employees must do, and when elections are due. Use the Health Net-provided communication template where required.
• Before Health Net ends: confirm carrier approval, effective date, first premium, completed enrollment, ID-card expectations, COBRA administration, and continuity-of-care requests.
• After the transition: reconcile billing and enrollment, help employees resolve access problems, and continue directing unresolved Health Net claims questions to the number on the member’s former ID card.

Frequently asked questions

Is Health Net leaving California completely?

No. The announcement concerns Health Net’s California commercial employer-group line. It should not be described as an exit from every California market.

When will a Health Net group policy end?

Health Net’s broker FAQ says policies are expected to end February 28, 2027, or as otherwise permitted by the applicable contract and regulatory requirements. Each employer’s formal notice provides the date that applies to that group.

Can an employer renew before February 28, 2027?

The FAQ says yes, but the renewed policy will still be subject to the February 28 sunset or another date permitted by the applicable contract and regulatory requirements.

Should every employer change carriers on January 1?

No. January 1 may reduce the risk of two deductible periods in one calendar year, but pricing, networks, implementation time, contracts, and accumulator-credit rules must be compared for the specific group.

Will deductibles and out-of-pocket amounts transfer?

They may not transfer automatically. The employer should ask the replacement carrier whether accumulator credit is available, which expenses qualify, and what documentation must be submitted.

What happens to existing prior authorizations?

Health Net authorizations may not transfer to the new carrier. Members should retain copies and work with the treating provider and replacement plan early to request any new authorization or continuity-of-care review.

Are dental, vision, and life insurance affected?

The broker FAQ includes dental, vision, standalone dental, standalone vision, and EGWP products in the transition, with separate communications to follow. It says Health Net life insurance policies are not affected.

Get help comparing replacement coverage

Skyline Benefit can help California employers organize their census, compare replacement group plans, verify provider and prescription considerations, and coordinate enrollment timing. Request a Health Net replacement-plan review before canceling existing coverage.

Source and scope: This article summarizes the “CA Commercial Group – External (Broker) FAQ” provided to Skyline Benefit on September 2, 2026, along with the official consumer resources linked above. It is general educational information, not legal, tax, medical, or compliance advice. The employer’s formal Health Net notice, contract, replacement-carrier documents, and applicable law control.