HealthEquity Inc. just keeps growing and growing.
The nation’s largest health savings account (HSA) non-bank custodian will grow by 550 jobs over the next seven years in Draper, where it has its headquarters. The company will be eligible for a state tax credit of more than $2.3 million over seven years. The Governor’s Office of Economic Development (GOED) board awarded the incentive at its April meeting.
It’s not the first time for HealthEquity to get an incentive from GOED. In December 2015, it announced it would use an incentive to expand at its Draper headquarters to create up to 200 jobs in Utah within six years. The company was awarded another incentive in October 2018, tied to the creation of 500 jobs in Draper.
Founded in 2002, HealthEquity has nearly 12 million members in partnership with employers, benefits advisors, and health and retirement plan providers. The company’s products and services include a healthcare saving and spending platform, a cloud-based platform for individuals to make health saving and spending decisions, pay healthcare bills, compare treatment options and prices, grow their savings, and make investment choices. Part of its corporate culture is striving to provide what it calls “purple” service.
HealthEquity last year acquired WageWorks, a technology-based consumer-directed benefits company, and announced details of a $80 million-to-$100 million investment to upgrade services offered by the combined company.
“We’re extremely proud of our Utah roots and the opportunity to expand our business while providing jobs and enhancing growth in our backyard,” Jon Kessler, president and CEO, said in a prepared statement. “Additionally, as we’re in the middle of navigating these uncharted waters of COVID-19, we recognize this as an opportunity to provide ‘purple’ to so many, as well as acknowledge the position we have to make a positive impression on our state’s economic development.”
The $38 million Draper expansion project is expected to result in new wages of $281.1 million over seven years, with the average pay of the new positions being $102,000 a year. New state tax revenue is projected to be about $11.7 million over seven years.
In March, the company reported a fourth-quarter net loss of $200,000, or less than one-half of a cent per share, That compared with net income of $13.1 million, or 21 cents per share, for the same period a year earlier. Revenue in the fourth quarter totaled $201.2 million, up from $75.8 million in the prior-year quarter. For the full fiscal year, the company reported net income of $39.7 million, or 58 cents per share. That compares with $73.9 million, or $1.17 per share, for the prior year. Revenue in 2019 totaled $532 million, up from $287.2 million in the prior year.
“They are growing very quickly and we can’t be happy enough that they keep coming back to us,” said Mel Lavitt, chairman of the GOED board’s incentives committee. “They are becoming a major factor in our economy.”
Thomas Wadsworth, GOED associate managing director, called the company “a real success story for the state for a number of years.”
Darcy Mott, executive vice president and chief financial officer, noted the longtime relationship between the company and GOED. “We’re very grateful for the partnership and we look forward to continuing this relationship,” he said.
David Dobbins, Draper’s administrative director, said he was “not just happy but proud” to support the company’s request for an incentive.
“HealthEquity has become such a successful company and we’re glad that they’re in Draper, and we’re glad that we have a strong relationship with them at the city level,” Dobbins said. “But it’s a great example of what happens when we all work together to keep jobs in Utah, and I think this will be something that will benefit all of us going forward.”
In a prepared statement, Val Hale, GOED executive director, described HealthEquity as “a homegrown Utah company with a solid track record and an impressive team member development program.” He added that the company is committed to hiring and developing talent within the state.
“HealthEquity’s continued expansion in Utah is a testament to our ‘health-tech’ industry, with its talented workforce and business-friendly environment,” said Theresa Foxley, president and CEO of the Economic Development Corporation of Utah. “This is also indicative that the state’s post-performance tax credits are well-suited to keep Utah-based companies adding jobs to our economy.”
Dr. Steve Neeleman, founder and vice chairman of the company, is a member of the GOED board but recused himself from the discussion and vote on the incentive.