When Company A acquires Company B through an asset acquisition, and runs the
business of Company B, including maintaining corporate offices, fixtures,
fittings, client lists, business records, etc - as well as some of the prior
employees of Company B, does Company A have an obligation to offer COBRA
coverage to the former employees of Company B. Company B cancelled its health
care plans upon the asset sale. It feels to me like the asset sale was a tactic
for the acquiring company to avoid liabilities, including COBRA.

Mancini:

Sadly it's a tactic that will work. Trying to convince the gov of an owners
motivation, is a difficult thing. Companies do things to avoid liability often.
Some legal, and ethical, some not so legal or unethical. You could complain to the secretary of labor or the IRS, and make them aware of the company dumping the health insurance, but it would be more of a personal "crusade."

If the plan ends, there is nothing to continue. COBRA would not apply. If the
buyer had a health care plan, that would be dif.

Federal regulations provide little guidance on the impact of a company sale or
acquisition. The general rule is that the seller retains liability for any
pre-transaction qualifying events (i. e. , existing COBRA beneficiaries). The
exception is if the seller ceases all health care plans and the buyer has a
plan. In this case, if the buyer is a successor under federal regulations, he
will assume responsibility. A buyer is considered a successor if he continues
the business operations associated with the purchase without interruption or
substantial change and the seller ceases to provide any group health plan to any employee in connection with the sale (26 C. F. R. 54. 4980B-9, Q&A-8).
COBRA if your company is sold

Many thanks. As it turns out, the successor/purchaser tried to get out of obligations re cobra, but I threatened to write the dept of labor, the irs and also to sue them, on the theory that the "asset sale" was a scheme to avoid cobra - especially as they used the same offices, provided the same services, had the same client list, and indeed, kept many of the same employees!!!

So they reinstated cobra for more than 30 people....HOWEVER, they just filed for bankruptcy!!! Such is the world of spa's in NYC. As a result, it is not clear what will happen in the future. We are waiting to learn whether and for how long COBRA will continue.

What a mess, huh?

If a company liquidates and discontinues the group health plan, continuing that coverage through COBRA is no longer an option.