Acquisitions

3 Months Ended

Mar. 31, 2013

Acquisitions

(3) Acquisitions

Aflac Channel Partner Arrangement

In April 2012, the Company entered into a channel partner arrangement with American Family Life Assurance Company, or Aflac, pursuant to which Aflac’s FSA and commuter account administration business would be transitioned to the Company. As of March 31, 2013, the transitioning of existing Aflac employer clients has been completed. In the first quarter of 2013, the Company paid Aflac $0.9 million in connection with the final employer clients that transitioned to the Company. The Company has capitalized these payments as an intangible asset, under client contracts in the table in Note 4, and will amortize the asset over an expected life of 7 years.

In conjunction with the transition, Aflac and the Company also entered into a separate reseller arrangement pursuant to which Aflac agents will sell the Company’s FSA, HRA, HSA, commuter and COBRA at agreed prices and commission levels to new employers going forward.