Voya Financial agreed to buy Benefit Strategies, a third-party administrator of health savings and spending accounts.
Terms of the deal were not disclosed.
The acquisition will accelerate Voya's expansion into the health savings and spending accounts market and support its workplace growth strategy, said Rob Grubka, CEO of health solutions for Voya, in a news release Monday.
"In addition to complementing Voya's current health and wealth solutions, Benefit Strategies will deepen our capabilities to serve new and existing health savings and spending account clients through its enhanced call center support, implementation management and ongoing client services," Mr. Grubka said.
The deal, which is expected to close in the third quarter of 2021, will also boost Voya's investment management business, which manages invested assets in Voya's health savings accounts, the news release said.
Benefit Strategies provides administrative services for flexible spending accounts, health savings accounts, health reimbursement arrangements and other services to more than 3,400 employers and nearly 370,000 participant accounts throughout the U.S. Officials at Voya and Benefit Strategies could not be reached for information on their HSA assets under administration.
As part of the transaction, Paul Smith, Benefit Strategies' CEO and founder, and about 150 of his company's employees will join Voya after the deal closes.
"I admire and appreciate the customer-centric focus that Voya is taking to help its clients address the many financial and health challenges that they are facing," Mr. Smith said in the news release.
Voya launched its portfolio of HSA and other related services, including flexible spending accounts, in January 2019. In early 2021, it expanded its offerings to include health reimbursement arrangements and COBRA administration.
Mr. Grubka said the "strong growth potential for Voya in the health savings and spending accounts business," noting that there were some 30 million HSAs in the U.S. today.
"With employees increasingly turning to the workplace for help to advance the financial well-being of their household," he said, "the health savings and spending accounts market is growing rapidly."