Archived Insight | September 28, 2020

Multiemployer Health Plan Mergers: Is Bigger Better?

Health plan mergers may help multiemployer health plans maintain financial sustainability, but there are drawbacks.

In this article, we explore questions like:

  • Why merge health plans?
  • What are the overlooked drawbacks to health plan mergers?
  • What are the benefits to a partial merger?
  • What should trustees be asking before agreeing to a merger?

To get the full picture, download the article.

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According to Megan Kelly, our National Multiemployer Health Practice Leader, multiemployer plans exploring health plan mergers should consider that:

  • Health plans can merge for a variety of reasons, but most of them revolve around remaining financially solvent for participants.
  • Mergers can result in the loss of autonomy for some plans, depending on the structure of the merger.
  • Plans can agree to a partial merger, but this can lead to a contentious atmosphere among trustees if they don't establish trust and clear lines of communication.
  • Trustees thinking about a merger need to check with their attorney to review the compliance implications and make sure they are fulfilling their fiduciary duty to their participants. 

If you have any questions about these key takeaways or the full guidance, get in touch. 

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.

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