OPM's $14.86M contract to HealthEquity offsets administrative fees for 2025 FSAFEDS

Contract Overview

Contract Amount: $14,860,000 ($14.9M)

Contractor: Healthequity, Inc.

Awarding Agency: Office of Personnel Management

Start Date: 2025-01-01

End Date: 2025-12-31

Contract Duration: 364 days

Daily Burn Rate: $40.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THIS TASK ORDER IS ISSUED TO OFFSET (BUYDOWN) PART OF THE ADMINISTRATIVE FEE CHARGED TO AGENCIES FOR BENEFIT YEAR 2025 WITH FUNDING FROM OPM'S RISK RESERVE ACCOUNT. FOR BENEFIT YEAR 2025, OPM WILL REDUCE FSAFEDS ADMINISTRATIVE FEE CHARGED TO AGE

Place of Performance

Location: DRAPER, SALT LAKE County, UTAH, 84020

State: Utah Government Spending

Plain-Language Summary

Office of Personnel Management obligated $14.9 million to HEALTHEQUITY, INC. for work described as: THIS TASK ORDER IS ISSUED TO OFFSET (BUYDOWN) PART OF THE ADMINISTRATIVE FEE CHARGED TO AGENCIES FOR BENEFIT YEAR 2025 WITH FUNDING FROM OPM'S RISK RESERVE ACCOUNT. FOR BENEFIT YEAR 2025, OPM WILL REDUCE FSAFEDS ADMINISTRATIVE FEE CHARGED TO AGE Key points: 1. This contract aims to reduce administrative costs for federal employees' Flexible Spending Accounts (FSAs). 2. The funding is drawn from OPM's Risk Reserve Account, indicating a strategic allocation for cost management. 3. It addresses the administrative fee charged to agencies for benefit year 2025. 4. The contract is a delivery order against an existing contract, suggesting a streamlined procurement process. 5. The fixed-price nature of the contract provides cost certainty for the government. 6. The duration of one year aligns with the benefit year it is intended to cover.

Value Assessment

Rating: good

The contract value of $14.86 million for offsetting administrative fees appears reasonable given the scope of managing benefits for federal employees. Benchmarking against similar administrative fee offset contracts is challenging as these are often embedded within larger service agreements. However, the stated purpose of reducing costs suggests a focus on value for money. The firm fixed-price structure helps control expenses.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This competitive process is expected to drive favorable pricing and ensure the government receives the best value. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition.

Taxpayer Impact: Full and open competition generally leads to more competitive pricing, which benefits taxpayers by ensuring federal funds are used efficiently to offset administrative costs.

Public Impact

Federal employees participating in the Federal Flexible Spending Account Program (FSAFEDS) will benefit from potentially lower administrative fees. The contract supports the efficient administration of health and dependent care benefits for federal workers. The geographic impact is nationwide, covering all federal employees eligible for FSAFEDS. This contract indirectly supports the federal workforce by ensuring the smooth operation of benefit programs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for administrative inefficiencies if the offset does not fully cover the intended reduction in fees.
Reliance on a single vendor for a critical administrative function could pose a risk if not managed closely.

Positive Signals

Directly addresses cost reduction for a federal benefit program.
Utilizes a dedicated reserve account for strategic financial management.
Awarded through full and open competition, suggesting market responsiveness.

Sector Analysis

This contract falls within the broader financial services and benefits administration sector, specifically focusing on third-party administration of insurance and pension funds. The market for such services is competitive, with numerous providers offering solutions for managing employee benefits. The spending aligns with government efforts to efficiently manage administrative overhead for its workforce programs.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not explicitly detailed for this specific delivery order. As it was awarded under full and open competition, the primary focus was likely on the best overall value from all eligible offerors, rather than specific small business participation goals for this particular task.

Oversight & Accountability

Oversight for this contract would typically reside with the Office of Personnel Management (OPM), which is both the contracting agency and the beneficiary of the administrative fee offset. OPM is responsible for ensuring HealthEquity, Inc. fulfills the terms of the delivery order and that the funds are used as intended to reduce administrative fees for the FSAFEDS program.

Related Government Programs

Federal Employee Health Benefits (FEHB)
Federal Employees Dental and Vision Insurance Program (FEDVIP)
Flexible Spending Account (FSA) Programs
Office of Personnel Management (OPM) Administrative Operations

Risk Flags

Funding Source Appropriateness
Vendor Performance Monitoring
Cost Savings Realization

Frequently Asked Questions

What is this federal contract paying for?

Office of Personnel Management awarded $14.9 million to HEALTHEQUITY, INC.. THIS TASK ORDER IS ISSUED TO OFFSET (BUYDOWN) PART OF THE ADMINISTRATIVE FEE CHARGED TO AGENCIES FOR BENEFIT YEAR 2025 WITH FUNDING FROM OPM'S RISK RESERVE ACCOUNT. FOR BENEFIT YEAR 2025, OPM WILL REDUCE FSAFEDS ADMINISTRATIVE FEE CHARGED TO AGE

Who is the contractor on this award?

The obligated recipient is HEALTHEQUITY, INC..

Which agency awarded this contract?

Awarding agency: Office of Personnel Management (Office of Personnel Management).

What is the total obligated amount?

The obligated amount is $14.9 million.

What is the period of performance?

Start: 2025-01-01. End: 2025-12-31.

What is the historical spending by OPM on administrative fee offsets for FSAFEDS?

Historical spending data specifically for administrative fee offsets for FSAFEDS by OPM is not readily available in the provided context. This particular contract, valued at $14.86 million, is for the benefit year 2025 and is funded from OPM's Risk Reserve Account. To assess historical patterns, one would need to examine OPM's budget allocations and prior contracts related to FSAFEDS administration over several fiscal years. It's possible that such offsets are not a recurring annual expenditure but are utilized strategically when specific funding or cost-saving opportunities arise, as indicated by the use of the Risk Reserve Account.

How does the administrative fee offset impact the overall cost of FSAFEDS for federal employees?

The administrative fee offset directly reduces the portion of the administrative fee charged to agencies for the FSAFEDS program for benefit year 2025. This reduction is intended to translate into lower overall costs for the program. While federal employees do not directly pay the administrative fee, it is factored into the overall program expenses, which can influence benefit enrollment and utilization. By offsetting a part of this fee, OPM aims to make the FSAFEDS program more cost-effective, potentially leading to savings that could be passed on through more competitive benefit offerings or reduced agency contributions in the future.

What is HealthEquity, Inc.'s track record in administering federal benefits programs?

HealthEquity, Inc. is a significant player in the health savings and benefits administration space. While specific details of their past performance on federal contracts are not provided in this data, the company generally administers a large volume of health savings accounts, flexible spending accounts, and health reimbursement arrangements for employers nationwide. Their experience in managing these types of accounts for a broad client base suggests they possess the operational capacity and expertise required for federal programs. A deeper dive would involve reviewing past performance evaluations and contract histories with federal agencies.

What are the key performance indicators (KPIs) for this contract?

The key performance indicators for this contract would likely revolve around the successful reduction of the administrative fee charged to agencies for benefit year 2025. Specific KPIs might include the exact amount of fee reduction achieved, the timeliness of the offset application, and the accuracy of financial reporting related to the transaction. Compliance with the terms of the delivery order and adherence to OPM's financial management guidelines would also be critical. The effectiveness of the offset in contributing to the overall cost-efficiency of the FSAFEDS program would be a primary measure of success.

Are there any risks associated with using OPM's Risk Reserve Account for this purpose?

Using OPM's Risk Reserve Account for administrative fee offsets carries inherent risks. The primary risk is that the reserve account may be intended for unforeseen emergencies or critical program needs, and its use for routine cost offsets could deplete funds needed for unexpected situations. Additionally, if the offset does not yield the anticipated savings or if there are issues with the vendor's performance, the reserve account's funds might be considered misallocated. Transparency in the decision-making process for utilizing the reserve account is also crucial to ensure accountability and prevent perceptions of impropriety.

Industry Classification

NAICS: Finance and Insurance › Agencies, Brokerages, and Other Insurance Related Activities › Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 15 W SCENIC POINTE DR STE 100, DRAPER, UT, 84020

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $14,860,000

Exercised Options: $14,860,000

Current Obligation: $14,860,000

Actual Outlays: $13,674,298

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 24361820D0002

IDV Type: GWAC

Timeline