Some insurance industry analysts have expressed concern about the planned exit from the California group market by Health Net. What does it say about the stability of the market? Is it a forecast of things to come?
The reality is insurers leave the insurance marketplace all the name. Oscar Health left the California group market in 2024. That was just a few years after joining forces with Cigna to launch co-branded small business plans in California. Aetna withdrew from the Covered California Affordable Care Act individual marketplace in 2025. Molina Healthcare is dropping parts of Los Angeles and Orange counties from Covered California for 2027. UnitedHealthcare, Anthem Blue Cross, and Blue Shield of California have reduced their Medicare Advantage PPO plans in multiple markets in recent years.
The story with Health Net is a little different, though. That’s because of its history. Health Net was founded in California nearly 50 years ago. It began in 1977 as a non-profit Health Maintenance Organization (HMO) subsidiary of Blue Cross of California. After a for-profit conversion in 1992, followed by several mergers, Health Net was acquired in 2016 by Centene Corporation. Health Net direct will end as a group health option next year. Only those who get their Health Net group health coverage through CaliforniaChoice will be able to maintain that coverage through year-end 2027.
If you start or renew your CaliforniaChoice plan through January 1, 2027, your employees who choose Health Net can maintain that coverage for the full plan year – through December 31, 2027. Plus, other employees have access to coverage from other participating health plans.
Market Stability
A carrier withdrawal from a major market like California could be expected to impact future premiums. Traditionally, when an insurer leaves the marketplace, it reduces competition among remaining insurers. However, it’s worth noting that Health Net is not a leading group insurer in the state. The leading group insurers in California are Kaiser Permanente, Elevance Group (parent of Anthem Blue Cross), and Blue Shield of California. Others include UnitedHealthcare, available statewide, and regional health plans. These include Sutter Health and Western Health Advantage, operating in Northern and Central California. Sharp Health Plan, which serves San Diego County and Southern Riverside County. There are other, smaller plans operating regionally as well. Larger plans like Aetna, Cigna, and LA Care also offer group health coverage in California. In spite of a perception of potential issues for the future of employer-sponsored health care, the California group health insurance marketplace remains strong. It features a roster of options from which employers can choose.
A “California Different” Approach
Perhaps the real future of group health is a multi-carrier exchange like CaliforniaChoice. Employers and employees have more flexibility than with traditional group health plans.
CaliforniaChoice recognizes that each employee is different. Each has different health care needs and preferences. CaliforniaChoice lets them choose from:
- seven health plans
- 100 coverage options (including HMOs, PPOs, and HSA-qualified coverage)
- a variety of provider networks
Depending on where employees live and work, they may be able to select coverage from:
- Anthem Blue Cross
- Health Net
- Kaiser Permanente
- Sharp Health Plan
- Sutter Health Plan
- UnitedHealthcare
- Western Health Advantage
Defined Contribution Puts You in Charge
With CaliforniaChoice, you choose the amount you want to spend on employee benefits. You can choose a fixed percentage of costs (50% to 100%) of your preferred Tier, health plan, or benefit level. Or you can fund the lowest-cost plan.
Your Defined Contribution is like a gift card. Employees use it toward the premium of their preferred health plan. If their cost exceeds your contribution, they simply pay the difference.
Whatever contribution amount you select, you can take comfort knowing your premium is locked in for 12 months. At renewal, you can adjust your premium contribution – up or down. That gives you total control over your benefits budget for another 12 months.
But That’s Not All
Health insurance is the foundation of the CaliforniaChoice program, but employees can also take advantage of:
- Dental coverage (Dental HMO and PPO choices)
- Vision benefits
- Chiropractic and Acupuncture
- Life and AD&D Insurance
- Voluntary coverage for Accidents, Critical Illness, Hospital Indemnity, and Legal Plans
Plus, the Member Value Suite and Business Solutions Suite offer value-added benefits, including:
- Prescription savings with the California Rx Card
- Discounted pet insurance through MetLife and Spot
- Fitness savings, including gym memberships for $28 per month
- Discounts on fitness products from Garmin, Vitamix, Fitbit, and others
- Savings on hearing tests and hearing-related products
- Cal Perks savings on entertainment, travel, theme and water parks, sporting events, and more
- Premium Only Plans (POPs) that allow employees to pay certain insurance premiums on a pre-tax basis
- Flexible Spending Accounts (FSAs) for groups with 15+ employees
Talk With a Broker to Learn More
To learn more about how CaliforniaChoice can help you control costs and offer more to employees, ask your employee benefits broker. You can get a personalized quote for your group with no obligation. If you don’t already have a broker, CaliforniaChoice makes it easy to search for one online.
