The turnabout comes as the nation’s largest health insurer is expanding into Obamacare policies across much of the country after initially bypassing the government-run marketplaces.
But UnitedHealth’s bid in California faces opposition from consumer and labor groups over the company’s marketing of a bare-bones health plan to large employers.
Consumer group Health Access and the California Labor Federation are asking the exchange to ban participating health plans from offering those "skinny" policies.
The two groups cited UnitedHealth marketing materials promoting the skinny health plans as a way for employers to skirt requirements of the Affordable Care Act for minimum coverage and avoid some federal penalties.
Thursday, the board of the Covered California exchange is scheduled to discuss its rules for new insurers and take action.
In a letter to state officials, Brandon Cuevas, chief executive of UnitedHealthcare of California, urged them to support expansion and not limit companies to certain markets.
"We are prepared to enter the market statewide, in all regions for both the health benefit exchange and small business health options program including those where little or no choice currently exists for consumers," Cuevas said.
"We understand the hesitancy that our competitors may have as well the exchange board to allow new entrants prior to 2017," Cuevas said.
In addition to UnitedHealth, New York start-up Oscar Insurance Corp. has also expressed interest in selling policies in Covered California starting next year. Insurers must notify the exchange of their intent to apply by Feb. 16.
Many consumers may welcome the fresh competition.
California Insurance Commissioner Dave Jones has criticized the state exchange for a lack of insurers in some areas. Overall, four large insurance companies, led by Anthem Inc., controlled 94% of Covered California enrollment in its first year.
UnitedHealth announced it was exiting California's individual health insurance market just prior to the launch of the Affordable Care Act in fall 2013. It canceled its remaining policies at the end of that year.
UnitedHealth continued to serve California employers and workers. The company covers more than 3.1 million Californians.
But leaving the individual market usually means an insurer can't return to that business for five years.
Cuevas said "we have been collaborating with regulators to determine the feasibility of 2016 market re-entry."
UnitedHealth didn't comment on the criticism of its skinny health plans. It has defended them in the past as a product that some customers want.
Anthony Wright, executive director of Health Access, said Covered California must close that loophole before allowing new insurers in.
"We want other health plans, but we want them to be good partners who make the Affordable Care Act work rather than punching holes through the intent of the law," Wright said. "We want to nip this in the bud."
The Obama administration took steps late last year to limit the appeal of narrow employer plans. These policies typically cover doctor visits and preventive care but exclude major benefits such as hospitalization.
Covered California offers a big opportunity for insurers. The exchange signed up 1.2 million people during the initial rollout and 217,000 have newly enrolled since Nov. 15.
After taking a wait-and-see approach to Obamacare, UnitedHealth now participates in 23 state exchanges across the country.
A spokeswoman for Covered California declined to comment ahead of Thursday's board discussion.
The exchange's longstanding policy has been to wait until 2017 to add health plans that had passed on the initial rollout.