Draper’s HealthEquity Inc., an administrator of health savings accounts and other consumer-directed benefits (CDB), has acquired WageWorks of San Mateo, California. WageWorks is also a leading administrator of consumer-directed benefits, including flexible spending and health reimbursement accounts and COBRA insurance programs.
“This acquisition establishes HealthEquity as the complete partner for employers, benefits consultants, health and retirement plan providers seeking to help working families connect health and wealth,” HealthEquity said in a release.
HealthEquity also announced details of a $80 million-to-$100 million investment to upgrade services offered by the combined company. HealthEquity expects to bring all WageWorks customer care back to the United States; expand its digital and live member engagement capabilities, including benefits experts available 24 hour a day; simplify administration for employers through a unified platform; and strengthen data security and privacy protections across all of its new CDB offerings. The company expects to complete the changes within 24 to 36 months.
“Delivering remarkable service, above and beyond what others expect, is the foundation of ‘purple.’” said president and CEO Jon Kessler, referring to the moniker used by HealthEquity to describe its culture and values. “These investments will extend purple to everything we now offer.”
“We believe a complete solution, highly focused on service and engagement, can accelerate the marketwide movement to HSAs and catalyze consumer understanding of how best to use them,” said Stephen Neeleman, HealthEquity’s founder and vice chairman. “Together, with our talented new teammates, we believe we are now better-positioned to realize HealthEquity’s vision of every American family using an HSA to reduce the lifetime cost of healthcare.”
The acquisition will bring WageWorks’ nearly 2,000 employees and HealthEquity’s 1,000 employees under the same management.