CalPERS will remove two UnitedHealthcare HMO plans from its health benefits program at the start of 2027, notifying members enrolled in SignatureValue Alliance HMO or SignatureValue Harmony HMO that both plans exit the roster on January 1. The change applies to active, non-Medicare CalPERS members in those two plans or in a UnitedHealthcare Combination Plan; UnitedHealthcare Group Medicare Advantage continues unchanged for CalPERS’s retired Medicare members. Anyone affected has a defined window to pick a replacement: CalPERS’s 2026 Open Enrollment period runs from September 14 through October 9.
Inside The Retirement Tax & Withdrawal Planner: the account withdrawal order and the RMD schedule calculator are built for exactly the year a mandatory plan switch changes what a household pays for coverage. Recheck the withdrawal order before the 2027 switch takes effect →
What CalPERS’s Own Notice Names And When It Takes Effect
CalPERS’s health benefits page lists SignatureValue Alliance HMO and SignatureValue Harmony HMO as the two Basic Plans being removed for the 2027 plan year, effective January 1, 2027, according to CalPERS’s notice on the removal. The same page describes the affected group as active, non-Medicare members enrolled in either plan or in a UnitedHealthcare Combination Plan, and it states that UnitedHealthcare Group Medicare Advantage will continue for CalPERS’s retired Medicare members, a distinction CalPERS draws between its non-Medicare Basic plans and its separate Medicare plans. That distinction sets the boundary of this story: it changes how CalPERS’s working-age and pre-Medicare membership gets HMO coverage, not the Medicare Advantage plans that cover CalPERS’s retired, Medicare-enrolled population.
The Rate Increases CalPERS Chose Not To Pass Through
Behind the removal are two rate requests CalPERS says it declined to accept in full. UnitedHealthcare proposed a 23% rate increase for SignatureValue Alliance HMO and a 21% increase for SignatureValue Harmony HMO for the 2027 plan year, according to CalPERS’s page on the change, increases the agency estimates would have added roughly $167 million in premiums paid by members and employers combined had they gone into effect. That estimate is a systemwide figure covering every member and every participating employer, not one household’s individual share. Rather than pass an increase of that size through, CalPERS is discontinuing both plans outright. In the counties they served, the same page lists a new Sutter Health Plan option becoming available in Placer, Sacramento, San Joaquin, Stanislaus, Solano and Yolo counties starting with the 2027 plan year, giving members in that region at least one additional HMO to weigh against whatever plan CalPERS would otherwise assign them.
The October 9 Deadline, And The Default If Nobody Chooses
CalPERS opened its 2026 Open Enrollment period on September 14, with a health plan search tool available through myCalPERS starting September 8, and the window closes October 9, according to CalPERS’s own Open Enrollment page, which separately confirms that changes made during this window take effect January 1, 2027 and directs affected members to the dedicated removal notice for transition details. A member currently enrolled in SignatureValue Alliance, SignatureValue Harmony or a UnitedHealthcare Combination Plan can use that window to pick a different plan for 2027, weighing cost, doctor networks and prescription coverage the way any open enrollment period requires. CalPERS’s notice also states that a member who takes no action is not left without coverage: the agency automatically transfers an inactive member’s enrollment to a designated replacement plan based on the member’s county and ZIP code. That default protects continuity of coverage, but it carries no guarantee that the assigned plan keeps a member’s current doctors, hospital network or monthly premium the same, which is exactly the mismatch an open enrollment period exists to let a member avoid by choosing deliberately instead of by default.
The Trade-Off Behind Removing A Plan Instead Of Raising It
CalPERS’s move illustrates a trade-off common to large purchasers of group health coverage: when an insurer’s requested increase is judged too steep, the purchaser can absorb it, negotiate it down, or walk away from the plan. CalPERS chose the third option for SignatureValue Alliance and SignatureValue Harmony, which spares every member in those plans the specific 23% or 21% increase UnitedHealthcare had proposed for 2027. It does not spare anyone the work of picking a new plan by October 9, and it does not tell a member in advance what the replacement plan will actually cost. For a household that had budgeted around a known premium, an insurer exit that avoids one specific cost increase still produces a new, unknown one, set only once a replacement plan is chosen or assigned.
That unknown is precisely why CalPERS built a health plan search tool into myCalPERS starting September 8, rather than simply mailing out the auto-transfer assignment on October 10 and calling it settled. A member who compares options through that tool during the Open Enrollment window can weigh a new plan’s premium, deductible and provider network against the SignatureValue plan being retired; a member who lets the window close hands that comparison to CalPERS’s county-and-ZIP formula instead, which optimizes for continuous coverage rather than for cost or provider match to any one household’s situation.
Who The Change Reaches, And Who It Doesn’t
The scope CalPERS describes is narrower than “two HMO plans are gone” might suggest, and the narrower framing matters for anyone encountering this news secondhand. The removal applies specifically to CalPERS’s non-Medicare Basic plans and to the active and non-Medicare members carrying UnitedHealthcare coverage through the state’s public employee and retiree health system; it does not touch UnitedHealthcare Group Medicare Advantage, which CalPERS confirms continues unchanged for retired members already enrolled in Medicare. In a household where one spouse is still working under a Basic plan and the other is already on a CalPERS Medicare plan, only the working spouse’s coverage falls inside the October 9 deadline. The same logic applies to a member who is close to turning 65 but not there yet: this removal, and the Basic plan menu it changes, is a non-Medicare question until the member’s own Medicare enrollment shifts them onto a different part of CalPERS’s plan lineup entirely. That is a distinction CalPERS’s own notice draws explicitly, and it is why the same page, last updated July 15, 2026, remains the specific document to check before assuming this removal reaches a particular member’s coverage at all.
The Withdrawal Math A Plan Swap Doesn’t Settle
CalPERS is retiring two UnitedHealthcare Basic HMO plans on January 1, 2027 rather than pass along UnitedHealthcare’s proposed 23% and 21% rate increases. Members who don’t pick a replacement by October 9 are transferred automatically by county and ZIP code, which settles the coverage question but not what the new plan actually costs against the rest of a household’s spending.
The Retirement Tax & Withdrawal Planner pairs its RMD schedule calculator and its account withdrawal order to help work out which savings source absorbs a changed monthly health cost first.
Compare the RMD schedule calculator against a new premium in The Retirement Tax & Withdrawal Planner.
This article was produced with AI assistance and checked against the primary sources linked above.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
