CVS sells off health savings account arm PayFlex

CVS Health is selling off its health savings account business PayFlex to Millennium Trust, a bank that already offers retirement and financial services, but wants to expand into healthcare and benefits accounts.

Millennium Trust said that acquiring PayFlex will significantly expand its reach, allowing it to offer HSAs, health reimbursement accounts and flexible spending accounts. The deal will also allow the company to offer direct billing and COBRA administration services.

PlayFlex covers 2.4 million members and 2,500 clients. With the deal, Millennium will reach 5 million individual client accounts and $47 billion in assets under administration.

“This acquisition extends Millennium Trust’s core business and complements our strong retirement solutions, enabling us to offer a uniquely differentiated platform to our shared partners and clients that spans retirement, consumer-directed benefits, financial wellness, and institutional investment services," said Gary Anetsberger, CEO of Millennium Trust, in a statement.

Financial terms of the deal were not disclosed, and the parties expect it to close in the second quarter, pending regulatory approvals.

Millennium Trust said it plans to invest in PayFlex to build up its client roster and accelerate growth. Investments will encompass sales, service, product and technology improvements, according to the announcement.

“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,” said Michael DiSimone, CEO of PayFlex, said in a statement. “A long-term relationship with Aetna will allow PayFlex to continue to provide seamless, integrated solutions to our mutual clients.”