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HealthPlus in Flint Township.
(MLive.com File Photo)
FLINT TWP, MI - HealthPlus has sent a letter this week to the state detailing that it "will be experiencing a reduction in work force soon after May 15, 2015."
Last week, the insurance company announced the sale of its Medicaid and MIChild business units to Molina Healthcare of Michigan Inc., a for-profit Medicaid HMO. HealthPlus has more than 90,000 Medicaid and 6,000 MIChild members.
The deal is subject to regulatory approvals and closing conditions. The closing of the agreement is expected in the third quarter of 2015.
"As a result, many of our employees will suffer a permanent separation of employment," wrote Todd Harrison, director of human resources of HealthPlus, in a letter dated May 15 to the state in order to comply with the federal Worker Adjustment and Retraining Notification Act.
However, HealthPlus said Thursday, May 21, that it does not anticipate all employees will be laid off.
"Although reductions from its current staffing levels will be required, the timelines for any employee reductions are still being determined," said Graham Smith, HealthPlus vice president of sales and marketing, in an email. "HealthPlus does not anticipate all 500 positions will be eliminated."
Smith said the business decision was needed to raise capital to "maintain the HealthPlus brand as well as to allow HealthPlus to strengthen and grow its Medicare and commercial lines of business."
"The company's goal is to preserve as many HealthPlus jobs as possible," he said.
In March, the Michigan Department of Insurance and Financial Services gave HealthPlus 60 days to find a financial partner after losing millions of dollars over a number of years.
HealthPlus was formed in 1979 as a not-for-profit. The company employs more than 500 people in full- and part-time positions in Flint, Saginaw and Troy.
The company had searched for a company to take over assets since March, when the state's Department of Insurance and Financial Services ordered HealthPlus Insurance Co. and HealthPlus of Michigan to stop selling new or renewal policies for its preferred provider organization business.