Roughly three million Californians who rely on Health Net for health coverage are watching the company exit the business of insuring workers through their employers. Centene, Health Net’s parent company, confirmed to a healthcare trade publication that Health Net is leaving the traditional commercial group insurance market in California and Oregon entirely, ending every small and large employer HMO, PPO and POS plan by February 28, 2027. The move does not touch Medi-Cal, Medicare or the individual marketplace plans Health Net already sells — only the coverage that comes through a paycheck.
For a household that has never had to shop for its own health plan, the calendar matters more than the corporate reasoning. Employers began receiving notice on September 1, 2026, and every affected group now has until the last day of February 2027 to land somewhere else.
Centene Says the Exit Lets Health Net Focus on Government-Sponsored Coverage
“Health Net has made the decision to exit the traditional commercial group business in California and Oregon in order to focus on government sponsored healthcare,” a Health Net spokesperson said in a statement confirmed to the trade publication Becker’s Payer Issues. The company added that the change does not affect its Medi-Cal, marketplace or Medicare business.
The exit covers every small and large group HMO, PPO and POS product Health Net sells to employers in both states, and the final day of coverage is February 28, 2027, “or as otherwise permitted by the applicable contract and regulatory requirements,” according to the spokesperson. Health Net began mailing and emailing notices to employers and brokers on September 1, 2026.
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Medi-Cal, Medicare and Marketplace Plans Are Untouched
About two million of Health Net’s roughly three million California members are enrolled in Medi-Cal, the state’s Medicaid program, and none of that coverage is affected by the group-market exit. Health Net also continues selling individual and family plans on the state’s insurance exchange under its Ambetter brand, and its Medicare products, sold through the Wellcare name, are unchanged as well. The only coverage ending is the group insurance employers buy on behalf of their workers — a narrower slice of Health Net’s overall California business, but one that still touches a large number of small and mid-size companies across the state.
Health Net’s confirmation to Becker’s did not break out exactly how many of its roughly three million California members are covered through an employer group plan specifically, as opposed to an individual marketplace plan. What is clear from the numbers Health Net did confirm is that Medi-Cal enrollees, at roughly two million people, make up the largest single piece of its California membership, and none of them have anything to sort out because of this announcement.
The Countdown Toward February 28, 2027
Employers with a Health Net group plan now face a hard deadline. Renewal notices started going out at the beginning of September, and everything has to be resolved before the last day of February 2027 — either by moving the group to a new carrier or by dropping group coverage altogether. Word & Brown, a California insurance brokerage that works with employers on carrier transitions, has told brokers that groups moving early may also lock in more favorable rates before renewal pricing typically rises at the start of a new plan year.
Provider Networks and Prior Authorizations Do Not Carry Over Automatically
For employees, a carrier switch this size usually means more than a new insurance card in the mail. Prior authorizations already approved under a Health Net plan typically do not transfer automatically to a new insurer, so a worker mid-treatment for an ongoing condition may need a new referral or a fresh authorization once the employer’s new plan takes effect.
Prescription drug formularies also differ from carrier to carrier, which can change what a household pays out of pocket for a maintenance medication even though the diagnosis and the prescription have not changed at all. None of that is unique to Health Net — it happens whenever an employer switches group carriers — but the scale of this exit means it will play out for a large number of California and Oregon employers at once, over roughly the same few months.
What Happens if a Small Employer Can’t Line Up a New Carrier
Most employers currently on a Health Net group plan are expected to simply switch carriers, keeping their workers covered without a gap. But a market exit of this size — Health Net employs more than 5,700 people across California on its own and serves employer groups of every size in both states — means some employers, particularly very small businesses, could treat the transition as a reason to stop offering group coverage rather than shop for a replacement.
Workers who end up without job-based coverage of any kind have two main federal options. Losing employer coverage opens a Special Enrollment Period on the ACA marketplace, giving a 60-day window to apply for a new plan, with coverage able to start the first day of the month after the old plan ends. Some workers may also be able to temporarily keep their old employer coverage through COBRA continuation coverage, though COBRA generally requires the employer to still be sponsoring some group health plan, and it usually means paying the full premium once the employer’s share of the cost stops.
A Company Built Through a $6.8 Billion Acquisition Now Narrows Its Footprint
Health Net was founded in 1979 and became a Centene subsidiary in 2016, when Centene paid $6.8 billion to acquire it. The insurer still employs more than 5,700 people across California. The group-market exit does not, on its own, say anything about those jobs — Health Net’s spokesperson framed the move as a strategic narrowing toward Medicaid, marketplace and Medicare business, not a wind-down of the company itself. For employers and their workers, though, the practical result is the same regardless of the corporate rationale behind it: a plan that currently covers their household will not exist after February 28, 2027, and the search for what replaces it is already underway.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
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