Millennium Trust enters HSA market with purchase of PayFlex
The deal pushes Millennium up to 5 million individual client accounts and $47 billion of total assets under administration.
Millennium Trust Co. is taking a big bite of the health savings account market by acquiring PayFlex Holdings from CVS Health.
The addition of PayFlex, one of the leading providers of health savings accounts, will significantly expand Millennium’s platform to include HSAs, health reimbursement accounts, flexible spending accounts, COBRA administration, and direct-billing services.
With PayFlex’s 2.4 million members and more than 2,500 clients, Oak Brook, Illinois-based Millennium will grow to approximately 5 million individual client accounts and $47 billion of total assets under administration.
In connection with the acquisition, Millennium will enter into a long-term commercial relationship with affiliates of Aetna Inc., a CVS Health company. Under the agreement, PayFlex will remain Aetna’s preferred provider of HSAs and certain other consumer-directed benefit solutions for Aetna’s existing and prospective health care plan client base.
While the acquisition will not impact current users of PayFlex, the user experience is expected to improve and evolve, according to Erik Beck, chief growth officer at Millennium.
“We expect, plan and are super excited to improve the plan over time,” said Beck, who declined to provide specifics of the “product road map.”
However, Beck said, the improvements will cover everything from “the user experience to onboarding to everything else.”
Health savings accounts, which are only available to consumers enrolled in high-deductible health insurance plans, are often described as offering three tax benefits: The initial contributions are made with pretax income, the investment growth is tax-free, and distributions are tax-free as long as they’re used for qualified medical expenses.
The Internal Revenue Service defines a high-deductible health insurance plan as any plan with a deductible of at least $1,400 for an individual or $2,800 for a family. An HDHP’s total yearly out-of-pocket expenses (including deductibles, copayments and coinsurance) can’t be more than $7,000 for an individual or $14,000 for a family.
“Given our common commitment to a purpose-driven culture, driving innovation, and advancing operational excellence, we believe Millennium Trust is the right partner to accelerate PayFlex’s industry-leading solutions,” PayFlex chief executive Michael DiSimone in a statement.
“A long-term relationship with Aetna will allow PayFlex to continue to provide seamless, integrated solutions to our mutual clients,” DiSimone said.
Financial terms of the transaction have not been disclosed. The acquisition is expected to close in the second quarter.
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