GRAND RAPIDS — The planned acquisition of a Detroit-area third-party benefits administrator will give Priority Health a greater ability to pursue business with employers that self-fund their health benefits.
Priority Health targets the deal for Southfield-based CAM Administrative Services Inc. to close by July 1. The company, also known as CAMADS, will continue to operate under its current name and business model.
The deal comes after the Grand Rapids-based Priority Health and CAMADS did business together for several years, said Rick Morrone, the health plan’s senior vice president for employer solutions.
“As close strategic partners for years, we saw an opportunity to formally combine our strengths,” Morrone said. “Our shared vision, values and culture make this a natural fit.”
CAMADS already serves as the administrator for part of Priority Health’s book of business, some of which the company manages as a TPA, said Diane Wolfenden, vice president of the health plan’s eastern region.
As Priority Health seeks to grow its self-funded business, the acquisition of CAMADS “looked like a nice opportunity” strategically, Wolfenden said.
“It positions us better in the market,” she said. “We are looking at expanding our self-funded opportunities and having a TPA gives us more abilities to serve that client base. We see it as an area of growth.”
Priority Health declined to disclose the size of its current self-funded book of business. Terms of the transaction with CAMADS remain undisclosed as well.
By acquiring a TPA, Priority Health has greater ability to fashion policies for employers that already have or want to transition to a self-funded health plan.
“It’s nice to be able to have options,” Wolfenden said.
Priority Health, Michigan’s second-largest health plan, had nearly 830,000 members across all products lines at the end of the first quarter, according to a quarterly financial report by parent company Spectrum Health. About 480,000 people were enrolled in commercial policies from Priority Health.