EmblemHealth announced Tuesday it has entered into an agreement to sell Farmington-based ConnectiCare to California-based Molina Healthcare Inc. for $350 million.

The purchase price represents 25% of expected 2024 premium revenue of $1.4 billion, Molina said in a news release. The transaction is subject to federal and state regulatory approvals and to satisfying other customary closing conditions, but is expected to close in the first half of 2025, the companies said.

Founded in 1981, ConnectiCare was acquired by HIP Health Plan of New York in 2004; HIP later merged with Group Health Inc. in 2006 to form EmblemHealth. ConnectiCare said it serves approximately 140,000 members in Connecticut as of June 30. 

ConnectiCare offers fully insured individual health insurance plans in the state, serving about 78,817 customers on and off the Connecticut’s health insurance exchange, Access Health CT, according to the Connecticut Insurance Department.

It pulled out of the fully insured small group market in 2023, but still offers large group and fixed funding plans to employers. It also offers Medicare Advantage plans in the state.

A spokeswoman for EmblemHealth and ConnectiCare said no leadership or staffing changes are expected as a result of the sale. ConnectiCare employs approximately 420 people at its corporate headquarters at 175 Scott Swamp Road in Farmington.

Farmington-based WellSpark Health, a provider of corporate wellness programs, is not included in the deal, a ConnectiCare spokesperson confirmed.

EmblemHealth CEO Karen Ignagni said her organization is “taking a major step to support ConnectiCare’s growth by entering into an agreement with Molina Healthcare.”

Molina said the acquisition represents a strong strategic fit, adding “an established government business, recognized brand, and a statewide provider network.” It said the acquisition is expected to add $1 per share to new store embedded earnings.

Joe Zubretsky, Molina president and CEO, added that the addition of ConnectiCare adds “a new state to our portfolio.”

Long Beach, California-based Molina Healthcare Inc. provides managed healthcare services under the Medicaid and Medicare programs and through state insurance marketplaces in 19 states. According to its website, it serves approximately 5.1 million members and employs nearly 19,000 people.

In February, Molina reported net income of $1.09 billion, or $18.77 per diluted share, for all of 2023, up 37.8% from a year earlier. 

By David Krechevsky

Source: Hartford Business Journal