Health Net Exits California Commercial Group Health Market: What Employers Need to Know

Health Net has announced it will discontinue its California commercial group health insurance business, impacting both small business and large-group medical plans throughout the state. The carrier has stated it is shifting its focus toward government-sponsored healthcare programs, including Medi-Cal and Medicare.

For California employers currently offering Health Net group coverage, this announcement raises important questions about future benefits, employee communications, and replacement coverage options.

What Is Changing?

Health Net will be exiting the California employer-sponsored commercial health insurance market, including:

• Small Group Medical Plans
• Large Group Medical Plans

The change does not affect Health Net's Medi-Cal, Medicare, or Covered California offerings. Employers will receive formal notification of their specific coverage termination dates and transition timelines.

What Employers Should Do Now

While many employer plans will remain in force through their current policy periods, organizations should begin preparing now by:

• Reviewing upcoming renewal dates
• Evaluating alternative health insurance carriers
• Identifying employees with ongoing treatment or specialty care needs
• Preparing employee communications
• Working with their benefits advisor on a transition strategy

Planning early can help minimize disruption and ensure employees maintain access to the care and providers they rely on.

Protecting Employees During a Health Plan Transition

A carrier change affects more than just premiums and plan designs. Employees often worry about:

• Keeping their current doctors
• Access to specialists and hospitals
• Prescription drug coverage
• Upcoming procedures or treatments
• Understanding new benefits and networks

That's why a successful transition requires careful planning around both coverage options and employee experience.

An Opportunity to Reevaluate Your Benefits Strategy

Although unexpected, market changes can create an opportunity to review your overall employee benefits program. Employers may use this time to assess:

• Provider network access
• Employee affordability
• Plan design options
• Prescription coverage
• Long-term benefits strategy

Rather than simply replacing an insurance company, employers can take a more strategic approach to ensure their benefits package continues to meet the needs of their workforce.

We're Here to Help

For employers affected by Health Net's exit from the California group health insurance market, now is the time to begin evaluating options and developing a transition plan.

Our employee benefits team can help compare carriers, review networks, support employee communications, and guide your organization through the transition process with confidence.

Need help preparing for a Health Net transition? Contact our team today to review your options and build a strategy that protects both your business and your employees.