Q.- Our company is being acquired. It will not be announced to employees until the sale is final, which is expected 3/15. The majority of our employees will remain on our health plan through the end of March and then transition to the acquirer’s health plan April 1st. We will keep a few employees on our plan through the summer. Since there will be a plan when the employees transfer to the new company’s health coverage, will we have to offer COBRA to all employees?
A.- If employees are being terminated from employment with your company when they move to the acquiring company, there will be a COBRA event upon the acquisition. This is the case even if everyone is being hired by and offered coverage from the acquirer. Since your company is continuing to exist and will still have a health plan, it is likely that your company will have to offer the COBRA coverage. You should check the terms of the acquisition agreement to see if the COBRA obligation is addressed.
