The layoffs are planned between Jan. 7, 2011 and March 2012, according to a notice on the State Department of Labor Web site.
"This transition is part of Health Net of the Northeast's decision to exit the Northeast market", a company statement said Thursday. "We are providing all affected associates with 60-day advance notice, as well as a generous severance package."
The company said affected employees can apply for any job openings within Health Net and UnitedHealthcare.
The Hartford Courant reports that UnitedHealthcare bought membership renewal rights from the company.
Health Net had 112,000 members in the state as of 2009, according to the state Insurance Department.
The state Insurance Department approved the deal in 2009.
Doctors in the area say they'll now have to work with a whole new insurance provider, and it could affect patient care.
"Because it's a bigger entity, it's harder for us to sometimes deal with a bigger entity because some plans change, patients, employers, programs change, plans change and that impacts on how we can treat patients," said Dr. Mark Wilchinsky with Orthopaedic and Sports Medicine.
Nearby businesses owners are also wondering what the impact on their businesses will be. Giove's Pizza Kitchen says it will lose a lot of customers.
"Just from our deliveries, I know we do go there a lot, and I do believe it will affect our business, which hopefully I won't have to lay off any of my employees because I do feel it will slow down our lunch hour," said Rose Devellis, owner of Giove's Pizza Kitchen.
Pumpkin Preschool, which is located in the Health Net building, is also wondering how it will be affected.
"There's been a lot of questions with is Health Net affecting us, and with them leaving, are their children not coming," said Hope Serra, a preschool employee.