A health insurance giant has announced a deal that could make it a bigger player in the municipal and union plan markets.

UnitedHealth Group Inc., Minnetonka, Minn., says its UnitedHealthcare unit has agreed to pay $775 million in cash for the health-related businesses of Fiserv Inc., Brookfield, Wis.

The deal, which UnitedHealth hopes to complete by early 2008, would include the Fiserv Health medical benefits administration service, the Avidyn Health care management business, the ppoONE claim repricing service, the Innoviant pharmacy benefits management business, and an overpayment recovery service.

Fiserv Health helps run plans with about 2 million members, and it is especially strong in the municipal plan, Taft-Hartley trust union plan, hospital, and voluntary employees’ beneficiary association markets, UnitedHealth says.