ADP Extends Recruitment Through Retirement Solutions With New COBRA and Flexible Spending Account Programs.

Business and Technology Editors

ROSELAND, N.J.--(BUSINESS WIRE)--June 26, 2000

New Offerings Help Mid-sized Businesses Reduce Costs, Become More

Efficient and Relieve the Burden of Complex Paperwork, Recordkeeping

and Monitoring Government Regulations

As part of its ongoing initiative to provide businesses of all sizes with comprehensive benefits administration solutions, Automatic Data Processing Inc. (ADP(R)) (NYSE:AUD) announced today the addition of COBRA and Flexible Spending Account (FSA) services to its Major Accounts Services portfolio of solutions for mid-sized businesses. Available in conjunction with ADP's payroll or HR solutions or as stand-alone services, these new programs will assist clients with between 100 and 1,000 employees in streamlining what can otherwise be cumbersome and paper-intensive administration processes and monitoring compliance with Federal regulations. This addition represents an extension of ADP's existing COBRA and FSA offerings to clients with more than 1,000 employees through its National Accounts Services group.

"Our COBRA and FSA benefits services provide mid-sized businesses with the confidence and support they need to focus their efforts on strategic human resource issues such as recruitment, development and retention, that will ultimately help them succeed in today's tight labor market," said Slade Kobran, Vice President of benefits marketing, ADP Major Accounts Services. "Through these offerings, clients will no longer have to devote resources to monitoring compliance regulations governing their COBRA or FSA plans or conducting time-consuming administrative tasks associated with these benefits."

ADP COBRA Services' offering is a comprehensive program that helps clients navigate the complex regulations associated with the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986, which requires certain employers to offer continued health coverage to covered employees who suffer a qualifying event such as a reduction of work hours, termination or retirement. ADP assists human resources professionals by mailing required election packages to qualified beneficiaries, monitoring election within legally regulated timeframes and providing dedicated customer service associates to answer questions from employers, qualified beneficiaries, COBRA continuants and health care providers. ADP COBRA Services also collects and reconciles premium payments and tracks payment status from COBRA continuants. In addition, COBRA specialists monitor the regulatory environment to ensure that ADP's proprietary COBRA system and service associates accurately communicate the impact of changing COBRA regulations and any developments.

ADP FSA Services enables mid-sized clients to provide their employees with a convenient, tax-advantaged way to pay for health and dependent care expenses not covered by existing employee benefit plans such as out-of-network charges, prescriptions, co-payments and deductions under IRS requirements. ADP FSA Services' specialists allow companies to eliminate the costs for dedicated resources to administer health care or dependant care FSAs or Transportation Reimbursement Incentive Programs (TRIP) while utilizing a proven administration system to reduce the risk of FSA noncompliance.

Continuously updated to meet evolving regulations, ADP's standard FSA services include client service for employer contacts and plan participants, daily claims adjudication, weekly reimbursement check printing, tracking of participant payroll deductions, personalized participant account reporting and standard interfaces with ADP payroll solutions.

About ADP

Automatic Data Processing Inc. (NYSE:AUD) is one of the largest global providers of computerized transaction processing, data communications and information services, with more than $6 billion in revenues and more than 450,000 clients worldwide. ADP's Employer Services (ES) division is a leading provider of integrated business administrative solutions that help clients efficiently manage their internal processes, allowing them to focus on core competencies. ADP ES' offerings include both traditional and Internet-based outsourcing products and services, giving clients the ability to select from ADP's comprehensive range of World Class Service solutions. ADP's services include: payroll, tax regulatory management, HRMS, benefits administration, time and labor management, retirement plan services, online recruiting and pre-employment screening. For more information about ADP, or to contact a local ADP sales office, reach us at 1-800-225-5237, Extension 124 or visit our Web site at www.adp.com