UnitedHealth Group, Minneapolis, agreed to acquire Definity Health Corp., also based in Minneapolis, for $300 million in cash as part of UnitedHealth's ongoing effort to tap the burgeoning market for consumer-driven health plans.
Definity, a pioneer of consumer-driven health plans, provides benefits to more than 500,000 employees at nearly 100 companies, including 23 Fortune 500 firms. It projects 2005 revenue of about $100 million.
Officials said the acquisition is expected to close by year-end pending regulatory approval and would add "slightly" to UnitedHealth's earnings while boosting its consumer-driven membership to 1.3 million.
Consumer-driven health plans, typically a high-deductible insurance policy tied to a personal spending account, are a relatively new concept that supporters tout as an answer to soaring health benefit costs.
UnitedHealth, the nation's largest health insurer with 20 million members, entered the market in 2003 when it acquired health-account pioneer Golden Rule Insurance Co.
Definity is the latest of several recent acquisitions by UnitedHealth, including its acquisitions of 1.5 million-member Oxford Health Plans and 2 million-member Mid-Atlantic Medical Services.