HealthPlus of Michigan in Flint, Mich., and Health Alliance Plan in Detroit have received final state and federal regulatory approval to merge in a deal that officials say was effective Monday.
Last November, the two nonprofit health plans signed a letter of intent to merge and entered into due diligence.
The merger, which will create a 650,000-member insurance plan with 1,300 employees, is good news for HealthPlus for a variety of reasons. HealthPlus brought to HAP approximately 75,000 members.
While HealthPlus lost more than $35 million the past two years, the health plan has achieved $41 million in turnaround improvements, said Michael Genord, M.D., HealthPlus' former CEO. “It put us in a position to find a great health partner with HAP,” said Genord, who now is interim HAP chief medical officer and CEO for HAP Flint.
Matt Walsh, HAP COO, said the combined operation of HAP and HealthPlus will generate additional business, allowing HAP to expand its operations into mid-Michigan.
“Overall insurance operations (for HAP) remain profitable in 2015. Some business lines up and some down, including HealthPlus,” Walsh said. “I can't say the combined (operation) will be in the black (for 2015).”
But Walsh said HAP is optimistic that business operations will be good in 2016.
“HAP is thrilled about the opportunity to merge with HealthPlus,” he said. “We got several key customers and cover Southeast Michigan to mid-Michigan and beyond.”
The HealthPlus brand will continue during the integration period with HAP, Walsh said.
Moreover, HealthPlus employer groups will transition to HAP upon their next renewal and individual members will transition to HAP during the next open enrollment period.
Walsh said the national search for a CEO for HAP is ongoing. Former CEO James Connelly retired Dec. 31.
Because of financial problems, HealthPlus last year sold its 90,000-member Medicaid business to Molina Healthcare of Michigan for an unspecified price.
