Molina Expands Headquarters in Troy
The state's third-largest Medicaid HMO plans to double down on headquarters office space in Troy to keep up with a rapidly growing workforce tied to expanding Medicaid business in Michigan.
Molina Healthcare of Michigan is moving in the third quarter to a purchased 197,000-square-foot building in the Troy Corporate Center on West Long Lake Road east of Crooks Road. It's planning to initially occupy 90,000 square feet.
The company also continues to look for downtown Detroit office space for a satellite office.
Sunny Yu, a spokeswoman for Long Beach, Calif.-based Molina Healthcare Inc., the parent company of Molina Healthcare of Michigan, said its operations in the state will continue to "continue to grow and hire as needed." Michigan's expansion of Medicaid has been a boon for business.
The company has about 300 employees in Troy. Yu said the company does not know precisely how many employees it will add because of state contracts "still coming down the pipeline."
Jim Berkemeier, vice president of Southfield-based Advocate Commercial Real Estate Advisors, said 90,000 square feet could accommodate 450-600 employees, or 150-300 new hires, based on the industry standard of 150-200 square feet of office space per person.
Yu said Molina will have a new-hire estimate in about a month.
"With new projects coming down the pipeline, like Healthy Michigan Plan and the dual (Medicare and Medicaid) demonstration, we will most likely add more staff in the near future," Yu said.
Healthy Michigan is the state's new Medicaid program for people at or below 133 percent of the federal poverty level. Eligibility covers a single adult with annual income of $15,000 or less and families of four with annual income below $34,000.
Under health care reform, an estimated 320,000 uninsured people will be enrolled in Medicaid this year. By 2021, 470,000 will be covered, said the state Department of Community Health.
Stephen Harris, Molina's Michigan president, said the company projects to add between 25,000 and 30,000 Medicaid members this year.
"If we get beyond that, we are prepared," said Harris. "We are already increasing staffing in health care service areas."
New hires this year will include nurses, social workers and call center employees to answer members' questions, he said.
"Healthy Michigan requires us to schedule new members for a primary care physician visit within a few months of joining the plan. We need to build telephonic models to take care of this," Harris said.
Allan Baumgarten, a Minneapolis-based health researcher who publishes the Michigan Health Market Review, said Molina's expected hiring makes sense.
"The prospects for growth are very good because Michigan is expanding Medicaid eligibility and the early sign-ups are coming in very quickly," he said.
In terms of enrollment, Detroit-based Meridian Health Plan, United Healthcare Community Plan and Molina are the three largest Medicaid HMOs in the state, Baumgarten said. They are all expected to hire additional employees, he said.
Molina could take on tens of thousands of new Medicaid enrollees, Baumgarten said.
In 2009, Molina was the state's largest Medicaid HMO, with about 200,000 members. Meridian, which operated at the time under Health Plan of Michigan, was a close second at 197,000.
Since then, however, Meridian has gained about 90,000 members to 290,434, while Molina gained about 12,000 for a total of 212,914 in 2014, said the Michigan Department of Financial and Insurance Services. United is second-largest with 242,185 members.
Total enrollment for the 24 Medicaid HMOs in Michigan stands at 1.28 million, said DFIS.
Molina's real estate planning has an eye toward future needs. The late February sale of the building at 880 W. Long Lake was for "north of $10 million," according to Washington, D.C.-real estate information service CoStar Group Inc.
Molina currently occupies 60,000 square feet in the Liberty Center office complex at Big Beaver and Livernois roads in Troy.
Farmington Hills-based Friedman Integrated Real Estate Solutions LLC managed the building on behalf of the previous owner, Miami Beach, Fla.-based special servicer LNR Partners Inc., said Tom Lasky, a founding member of Bloomfield Hills-based Forum Group LLC.
Glenn DesRosiers, vice president for Friedman, said Molina was originally going to lease four floors at 880 W. Long Lake totaling 120,000 square feet but ended up buying the building instead.
Yu said Molina does not plan to lease the unoccupied space to other tenants.
Berkemeier said Molina's new building has been vacant since BBDO North America closed its office there in 2010 and eliminated 450 local jobs when it lost the Chrysler LLC marketing account that year.
Molina will be moving to the Troy Corporate Center from 100 W. Big Beaver, a multi-tenant building.
Crain's reported in December that Molina was considering moving to downtown Detroit. Harris said at the time that the company had not yet decided where to move.
Opening space downtown, which was discussed among real estate sources late last year, is still on the table, Yu said.
"We are considering the option of opening a satellite office in downtown Detroit," she said.
San Diego-based McKinney Advisory Group hired the Forum Group to represent Molina locally.
ource: Crain's Chicago