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Health Net Is Exiting the California Group Market
Health Net will no longer offer small or large group coverage in CA. In-force groups terminate February 28, 2027. Your Claremont team is ready to help find alternatives. Call 800.696.4543 or email quotes@claremontcompanies.com.
On April 2, 2026, the Centers for Medicare and Medicaid Services (CMS) finalized new rules affecting how employer group health plans determine Medicare Part D “creditable coverage” status, effective for plan years beginning on or after January 1, 2027.
The change
Starting in 2027, the Simplified Determination Method is retired. Group health plans that do not participate in the Retiree Drug Subsidy (RDS) program may only use the Revised Simplified Determination Method or a full Actuarial Equivalence determination.
Under the Revised Simplified Determination Method, a plan is creditable if it:
That threshold rose from 72% in 2026 and 60% in prior years.
What’s different from 2026
2026 was a transition year — plan sponsors could choose between the Simplified Determination Method and the Revised Simplified Determination Method. That choice ends in 2027: only the Revised Simplified Determination Method (at the higher 73% threshold) or an actuarial certification will be accepted.
Separately, the final rule also exempts account-based plans (HRAs, ICHRAs, and health FSAs) from the creditable coverage disclosure requirement altogether.
Why it matters
Plans that comfortably met the 60% or 72% thresholds under the Simplified Determination Method may not automatically meet the 73% threshold under the Revised Simplified Determination Method. Groups with leaner prescription drug benefits should have their plan design reviewed before their 2027 renewal to confirm creditable coverage status — losing that status can expose Medicare-eligible plan members to late-enrollment penalties. We will monitor the carriers and provide updates when creditable plans for 2027 are announced.
Questions?
Contact The Answer Team at 800.696.4543 or info@claremontcompanies.com.