Employee Benefits

The Value of a Trusted Insurance Carrier During an M&A

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Businesses considering a merger or acquisition (M&A) invest hundreds of hours reviewing the partnership opportunity. Often these potential deals must be consummated within several months of the initial discussion. According to national business experts, issues and problems often arise with employee benefits, which, if not addressed correctly, can cause an M&A to fall apart.

The M&A evaluation process can be streamlined by working with a trusted insurance carrier experienced in these types of deals, so they can conduct a comprehensive review of the benefits offered by both organizations. Consider four projects the carrier should handle:

  • Compare benefits – Develop a spreadsheet of all benefits available to employees, as well as retirees, at all levels of the organizations; identify the similarities and differences; analyze the benefits used most frequently by employees and their dependents
  • Identify contract restrictions – Some benefits may have contract restrictions about making changes or eliminating plans, especially for retirees or union employees; the carrier should create a list of these limitations and recommend options to amend the benefits
  • Develop a calendar of obligations – The carrier should create a list of contractual obligations and grandfathered plans as well as a calendar of dates when these items must be addressed
  • Design and communicate the new benefit package – The new plan should incorporate the features that are valued most, along with new options to help curb talent drain; the carrier should work with companies to communicate new benefit options through a variety of mediums to reach employees at all levels, including covered family members

An M&A provides unique opportunities for businesses to expand into new markets, or solidify an industry niche. Issues and concerns with employee benefits often slow down or kill M&A plans. Working with an experienced and trustworthy insurance carrier to develop a strategic assessment of benefit plans will help avoid potential problems in the future.

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