Very Small Employer Buys Larger Business, Now to Transition Groups

[yorkriver1]

My client is doing well, and is in negotiations to buy a larger trades contracting business with 20+ employees, and benefits.

Naturally, especially since the two companies will be reformed as one, I would want to set up new group coverage or get an AOR on existing, or roll the new EE's into the group we have now.

I am the agent on my client's very small group.

They are looking at becoming one at the beginning of next year. I would assume it's normal to ask for all kinds of business records when doing these kinds of purchases, such as looking at the health insurance being offered now, cost, etc.

Anyone have suggestions? Also, some employees could lose deductibles/out of pockets potentially. Any way to avoid?

 

[leevena]

This is relatively easy to do. Suggest you explain the situation to any carrier that you shop this with and get their answer, in writing. This includes the incumbent carriers. Doubt if carrier will provide credit for prior butb it could happen. I would do it now to avoid a rush.

 

[junkman]

Carriers will consider the group and apply whatever standards are appropriate based on size to the new group. You may have to modify benefits so that no employees from either group feel cheated. You may also need to distinguish based on class and have 2 or more benefit structures. Be wary of discriminating against lower income employees in favor of owners. You used to be able to do whatever you wanted but not so much these days.