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Conduent Inc. announced that the business processes outsourcing provider will exit the flexible spending account business, a company executive confirmed.
John Larson
Conduent will transfer all of its health savings account assets, currently managed on its consumer account platform, BenefitWallet, to HealthEquity Inc., a fintech company that serves as a non-bank health savings trustee.
The firms have entered into a definitive agreement to transfer $2.7 billion in HSA assets held by approximately 665,000 customers in Conduent’s BenefitWallet platform to HealthEquity, a release noted. The agreement, subject to regulatory approval, projected a purchase price of approximately $425 million for the transition of all BenefitWallet HSA accounts to HealthEquity, the release added.
“We will be converting our HSA accounts—the BenefitWallet HSA accounts—to Health Equity at some point during the first quarter of next year, and then ultimately exiting our FSA administration business,” says John Larson, Conduent’s vice president of HR services. “This is part of our overall portfolio rationalization strategy at Conduent: driving focus within the businesses that we excel in, while rationalizing the portfolio further and exiting businesses where it makes sense.”
Plan sponsor client notifications began this week, Larson adds. For plan participants with HSAs, Conduent will continue operating BenefitWallet and maintain accounts through the early 2024 conversion date, he explains.
“As we get closer to that [conversion] date, we’ll be communicating transition plans more broadly with our account holders,” says Larson. “Until that time, it remains business as usual for BenefitWallet.”
Currently, HealthEquity serves as the custodian of more than with assets totaling $23.2 billion, the release stated.
“Once the deal is approved, the HealthEquity and Conduent teams will begin detailed planning for the account transfers, including client and member communications, investments and the transfer timeline,” says Richard Putnam, vice president of investor relations at Health Equity, by email.
Going forward, Conduent will partner in HSA work instead of acting as direct administrator, Larson adds. Conduent will effectively shutter BenefitWallet and then will enter into a relationship with HealthEquity “to be our preferred partner for both HSA and FSA administration moving forward,” Larson says.
Assets held in HSAs surpassed $100 billion in total assets for the first time in 2022, and accounts experienced robust asset growth early in 2023, research from HSA consultant Devenir Group LLC showed, earlier this year.
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