Two health plans in Michigan, HealthPlus of Michigan and Health Alliance Plan, said on Monday they plan to merge, forming one of the largest plans in the state while bailing out the struggling HealthPlus business.
The companies said they signed a letter of intent on Oct. 2. No financial details were released.
Health Alliance Plan, a subsidiary of the Henry Ford Health System, already competes with Blue Cross Blue Shield of Michigan and Spectrum Health as one of the three largest insurers in Michigan according to 2013 data compiled by the Kaiser Family Foundation.
According to Health Alliance Plan CEO James Connelly, both insures have deep ties within Michigan labor organizations.
"It's a win for the members of both companies because two Michigan-based non-profit companies are coming together to provide excellent coverage, care and customer service," Connelly said in the announcement.
The deal would offer a lifeline to Flint-based HealthPlus, which has posted steep losses in recent years. In March, the state's Department of Insurance and Financial Services said it was trying to help HealthPlus find partners to shore up a $4.8 million budget gap reported at the end of 2014. The department also ordered HealthPlus to stop selling or renewing plans and the company said it laid off workers or trimmed staff through attrition to help improve its finances.
According to the announcement, HealthPlus members will still be able to access the same provider networks once the deal with Health Alliance Plan closes.