ACA Considerations In M&A Transactions

This column highlights some of the unique issues raised by the Patient Protection and Affordable Care Act in the context of corporate transactions.

One of the most difficult aspects of any corporate transaction is determining how the seller's employees should be treated as part of the deal, including the appropriate transition from the seller's employee benefit plans to the buyer's plans. The treatment of employees and employee benefit plans has historically been influenced by a number of factors, including the form of the transaction and an evaluation by the buyer of any liabilities associated with the employees and plans. Prior to the passage of the Patient Protection and Affordable Care Act (the ACA), there were a set of risks recognized by buyers in regard to health and welfare benefits that needed to be considered as part of the buyer's "due diligence" process, and in many cases both buyers and sellers understood the risk attendant to these sorts of plans. For