Changing Companies and Insurance
Feb 26, 1998
Dear Lynn or Nancy, I hope you can take a few minutes to answer the following question. It will help alot of people I work with. I work as a middle manager for a major hotel management company. We have about 190 employees. We also have great HMO insurance, as well as many hiv+ employees. The problem: In the following months we are being sold to new owners and a new management
company. Including myself, we are very concerned about losing our insurance. Do the new owners have to insure us?I have tried to look this up but cannot seem to find a definite answer. I have alot of worried emplyees and the present company is not talking!Please help us. We would be very grateful. Thank you, Todd
Response from Ms. Franzoi
There is no legal requirement for an employer to offer medical coverage. Therefore, if your company is sold, the new owners are not required by law to offer medical coverage to you. However, in order to better answer this question it would be helpful to know what type of purchase this will be, an asset or a stock purchase. The type of sale will impact what happens with plans and with COBRA. Please note that if the buyer has a medical plan in place, the most common thing that happens in these situations is that the new employer extends his plan to employees of the acquired company.
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