Acqusition / Insurance for new employees

4612155

We are acquiring a new business in an asset only purchase within the next 30 days. This is new territory for us and I have called our health care rep, but of course I never get called back in a timely manner........I am kicking myself for not thinking about this sooner........Once we take over this business they are going to be a totally new company. We are setting it up under a separate EIN number and it will be a separate LLC. So, my question is this, can we just add these new employees to our existing health care coverage (we are essentially "managing" this business for a fee, kind of as a broker) and bill their company for their share of the premiums, or do I need to set up a separate health care plan for them. I really REALLY hate to go down that road because we just won't get as good a quote and will have to get them on either a HSA or a high deductible plan versus the HMO/PPO dual option plan we have now..........Has anyone else gone through this before? I am worried that if we just add them to our health care plan there are going to be problems regarding taxes, profit and loss, etc.........Any ideas?

IT HR

Sounds like it is time for a new benefits broker. That is one thing I can say about my broker, when I call him he calls me back. We have a great relationship.  I think you have to have that or it is time to shop around!

I think each plan is going to be different and each state could be different as well, but it is my understanding from the past that as long the companies have the same ownership and have the ability to file joint tax returns (don't actually have to do this but have the ability because of the same ownership) then you can have them all on one plan.   With that being said I would not make a move until I got my rep/broker on the phone. If the person won't call you back then you need to go up the chain until you get an answer.  This is too important of an issue to just fly by the seat of your pants (so to speak!) and not have the correct information. You don't want to add someone to your plan only to find out they are ineligible for the plan and something major happen and on the reverse angle you don't want to go through the hassle of setting up a whole new plan if you don't have too!

 

IT HR

One other point. I currently have a HSA/High deductible plan for my employees. As hard as it is for them to understand the plan at the beginning (they didn't want to listen when they heard high deductible), my employees are actually saving money.  My employees that have family coverage and use all of the deductible are saving around $2000 a year on premiums. My company is also contributing some money toward the HSA. 

It is worth looking at this type of plan just to see if it will save the employees some money overall.  My employees like that they can use the HSA money for a lot of different things. HSA money rolls over from year to year (unlike FSA that is a use or lose it plan.)

 

4612155

Awesome! Thanks for the thorough response. I finally talked to our rep and he thinks we need to set them up under a separate plan (duh). There WILL be common ownership and we are basically going to be the holding company. However, I don't want to add another company to our plan if it is going to adversely effect our policy and experience rating. We are trying really hard to keep claims down (i.e. Wellness Program, smoking cessation assistance, etc) and it just isn't worth the risk to me. So technically, yes, we could add them to our plan, but I just don't think it's a good idea. I am really leaning towards an HSA because I really think it's the best possible option for them right now. Thank goodness we are doing an assets only purchase, huh??? Talk about reducing MAJOR headaches.........