COBRA under new ownership

[Guest LMPett]

Large company (20+ ees) is buying 100% ownership of two smaller companies. Each of the smaller companies will continue their in-force health insurance plans, their own 401k, their own employees, etc. The only thing changing is the actual ownership of the companies. It is a controlled group I believe.

Do the smaller companies now need to offer COBRA under their small group plans because the owner of the companies is subject to COBRA?

There is no outstanding COBRA liabilities, no employee is being termed. Just wondering going forward how 20+ employees are counted in this situation and can't find it exactly.

[Guest LMPett]

Never mind, found my answer in IRS ruling 2003-70. In case anyone else needs the answer, all employees counted if a stock purchase to determine COBRA. Not one entity if an asset purchase.