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May 2005
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HSA Market News May 2005; Volume 2, Number 5
M&A: 6 deals tops $1.1 billion...WellPoint to buy Lumenos...Cigna names VP, consumerism...HSA lives top 1 million...Aetna to buy Active Health...BCBS-LA picks Bancorp...BCBS-IL, FBSC offer HSA plan...BS-CA HDHP lives: 120,000...United offers new HRA options...Aetna to serve PacAdvantage...Cigna expands AZ HSA plans...Golden Rule deposits: $132 MM...HSA Bank raises interest rates...Mellon wins FBMC...ADP TotalSource taps JPMorgan...Metavante to buy Med-i-Bank...Evolution names EVP, sales...HealthEquity names CIO...Flex Benefit expands HSAs...Chart: M&A Deals...32% of employers to offer HSAs...FL to contribute to HSAs...HDHP tax breaks called for...and more...
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M&A: 6 DEALS TOP $1.1 BILLION
Since November 2003, when the consumer-directed merger and acquisitions market first started to take off—before reaching a crescendo in recent months—a total of $1.191 billion has been spent in six major purchases, according to an HMN tally.
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WELLPOINT TO BUY LUMENOS FOR $185 MM
Consolidation continues to sweep through the dwindling ranks of stand-alone HRA and defined contribution healthcare pioneers, with WellPoint Inc. (Indianapolis) announcing a definitive agreement to acquire Lumenos Inc. (Alexandria, VA) for $185 million in cash.
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CIGNA NAMES VP, CONSUMERISM
Cigna HealthCare, the healthcare unit of Cigna Corp. (Philadelphia), has named Michael Showalter vice president of consumerism in charge of consumer-driven healthcare product development and management, including the company’s HRA and HSA-compatible ChoiceFund product. He was most recently with UnitedHealth Group and Definity Health.
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HSA LIVES TOP 1 MILLION, AHIP TALLY SHOWS
The number of individual and group members choosing HSA-compatible high-deductible health plans is soaring, with 1.031 million lives signed up to date, more than double the 438,000 that had signed up as of last September, according to a tally by America’s Health Insurance Plans (Washington).
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METAVANTE TO BUY MED-I-BANK FOR $138 MILLION
Marshall & Ilsley’s Metavante Corp. (Milwaukee) has dramatically expanded its presence in the healthcare debit card business, announcing a definitive agreement to acquire Med-i-Bank (Waltham, MA) for $138 million in stock and $7 million in cash.
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AETNA PAYS $400 MILLION FOR ACTIVE HEALTH
With information expected to play a critical role in the future of consumer-directed healthcare, Aetna Inc. (Hartford, CT) has agreed to shell out $400 million in cash to acquire privately held Active Health Management (New York), a six-year-old provider of clinical-support tools promoting use of evidence-based medicine for physicians and health plan members.
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ADP OFFERS HSA PLANS; TAPS JPMORGAN AS TRUSTEE
As expected (HMN, February), ADP TotalSource (Miami, FL), the professional employer organization division of ADP, has announced that it is offering HSA-compatible health plans effective June 1, 2005 using JPMorgan Chase as preferred HSA trustee.
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EVOLUTION BENEFITS NAMES BLANK EVP, SALES
Evolution Benefits (Avon, CT) has named Kevin Blank executive vice president of sales, marketing and account management. Blank was most recently president of BenefitPoint (San Francisco) and also served stints at Internet HealthCare Group, Women’s Health USA and Value Health.
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UNITED’S GOLDEN RULE HAS $132 MILLION IN HSAs, MSAs
Golden Rule Insurance Co. (Indianapolis), a UnitedHealth Group company, announced that its members have more than $132 million in tax-advantaged accounts, including HSAs and MSAs. Golden Rule noted that 40% of its customers are choosing an HSA plan over more traditional types of health insurance. The company pays 4% interest on HSA accounts.
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HSA BANK RAISES INTEREST RATES UP TO 4%
HSA Bank, a unit of Webster Financial Corp. (Waterbury, CT), announced that it has raised the annual percentage yield on HSAs with balances of $15,000 or greater to 4%, from 3.82%.
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FBMC TO USE MELLON AS HSA TRUSTEE
Fringe Benefit Management Co. (Tallahassee, FL), a benefits administrator serving nearly 2 million public sector employees, will use Mellon Financial Corp. for preferred HSA trustee services, including HSA debit cards.
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BCBS-LA TAPS BANCORP AS HSA TRUSTEE
Blue Cross Blue Shield of Louisiana (Baton Rouge, LA) has selected Bancorp Bank (Wilmington, DE) as its preferred HSA trustee for the company’s BlueSaver HSA-compatible high-deductible health plan. BCBS-LA had more than 85,000 individual and group BlueSaver lives as of April 30.
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BCBS-IL, FBSC OFFER HSA PAYROLL DEDUCTION
Blue Cross Blue Shield of Illinois (Chicago) is offering its HSA-compatible high-deductible health plans as a voluntary benefit to groups of any size, with Flexible Benefit Service Corp. (Rosemont, IL) allowing employees to pay premiums through payroll deductions. The joint product, called FlexWorkplace, will be sold through brokers and general agents. BCBS-IL is a unit of Health Care Services Corp.
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BLUE SHIELD-CA HAS 120,000 HDHP LIVES
Blue Shield of California (San Francisco) said it had 120,000 members enrolled in high-deductible health plans as of May 19, with sales boosted by the introduction of HSAs.
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UNITEDHEALTH EARLY RETIREE PLAN HAS HRA OPTION
UnitedHealth Group (Minnetonka, MN) has launched a health plan for large groups that want to extend coverage to early retirees, in which the employer and employee put pre-tax funds into an account during active employment and then use the funds to pay for major medical coverage at retirement.
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PACADVANTAGE TO OFFER AETNA HSA PLANS
PacAdvantage (San Francisco), a group purchasing alliance for small businesses in California founded by the Pacific Business Group on Health, will begin offering three HSA-compatible PPOs from Aetna effective July 1, 2005.
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CIGNA EXPANDS HSA OFFERINGS IN AZ
Cigna Corp. (Philadelphia) said it would begin offering its consumer-driven Choice Fund HSA plan to Arizona businesses with 51 to 200 employees, with coverage effective July 1, 2005. Previously, the HSA plan was available only to employers with more than 200 employees. JPMorgan Chase is preferred trustee.
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HEALTHEQUITY NAMES CHAPMAN CIO
HealthEquity (Tucson, AZ), an HSA administrator, has named Mike Chapman chief information officer. He was most recently with eBusiness Software Consulting.
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FL STATE TO CONTRIBUTE TO EMPLOYEE HSAs
The state of Florida, which will begin offering high-deductible health plans to employees in fiscal 2006, will contribute $500 in dollar-for-dollar matching funds annually to individual HSAs and $1000 for families. The HSA provisions were a part of the fiscal 2006 budget passed by the state legislature this month; the budget is awaiting the signature of Florida Governor Bush.
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TAX DEDUCTIONS, CREDITS FOR HDHPs, HSAs CALLED FOR
A House bill calls for tax deductions for individuals of premiums for high-deductible health plans, tax credits for small businesses that contribute to HSAs, and tax credits for uninsured individuals.
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FLEX BENEFIT SERVICE OFFERS 2 NEW HSAs
Flexible Benefit Service Corp. (Rosemont, IL), an HSA administrator, announced the introduction of two new HSA options through Millennium Trust, which provides HSA trustee services.
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