Aetna Introduces Tools for Small Businesses That Lower Employer and Employee Taxes.

-- Flexible Spending Accounts, Two Other New Programs Offer Employees Convenience and more Spendable Income --

HARTFORD, Conn. -- Aetna (NYSE: AET) has introduced programs for small businesses that will reduce their payroll taxes and allow their employees to pay for certain out-of-pocket expenses on a tax-free basis. These products, targeted to businesses with two to 299 employees, include a Premium Only Plan (POP), a Flexible Spending Account (FSA) and a Transit Reimbursement Account (TRA).

"In today's market of high health care expenses, employers are asking employees to absorb more of the cost of health care. The Aetna FSA and Aetna Premium Only Plan are perfectly suited to help the employee offset that cost increase by allowing them to pay for these expenses on a tax-free basis," said Jerry Gooden, Vice President, Aetna Small & Middle Market Business. "Employees pay less in taxes and increase their disposable income, while employers pay less in payroll taxes and have a competitive product they can offer to attract and retain employees. It's a true 'win-win' scenario."

Aetna POP

The Premium Only Plan allows small business employees to make tax-free contributions towards their premiums and employers to reduce their payroll taxes. Eligible employee premiums that can be paid with pretax dollars include medical, dental, vision, cancer policies and life insurance (up to a $50,000 benefit). As health premiums change, employees' deductions can be adjusted.

Aetna FSA

FSAs give employees a chance to pay for health expenses with pretax money, including items not covered by health insurance such as over-the-counter drugs, eyeglasses, contact lenses, dental care, deductibles and coinsurance. This arrangement also enables employers to lower payroll taxes.

Aetna Transit Reimbursement Account (TRA)

A TRA allows employees to purchase/use mass transit vouchers on a tax-free basis, and be reimbursed for employment-related parking expenses, also on a tax-free basis. Employees can set aside up to $110 per month for mass transportation and $215 per month for parking (totaling $3,900 annually as of 2007) with pretax dollars.

Complete with No Paperwork

One of the most powerful features of the POP and FSA programs is a paperless claims submission and reimbursement for most claims incurred with a medical provider. There may be instances when an employee may need to submit a claim form, such as claiming over-the-counter eligible expenses (e.g. Tylenol bought at a drugstore).

"We are continually looking for innovative solutions to help our customers run healthy businesses, and we are proud to expand our portfolio with these new services," said Marcia Vannuccini, product head for Aetna Consumer Fund Services.

Other employee benefits include:

* Reducing taxable income while increasing spendable income

* Making funds available for health care expenses as they are incurred

* Allowing employees to pay for other types of benefits and services with pretax dollars

* Providing access to a member website where employees can download forms, use a savings calculator, and review a plan's status, claim status or reimbursement

For employers, the programs:

* Reduce the Federal Insurance Contributions Act (FICA) tax

* Help to recruit employees and reduce turnover

* Enhance employee benefits packages

* Typically pay for themselves with tax savings

The three offerings are available now to all 50 states.

Aetna is one of the nation's leading diversified health care benefits companies, serving approximately 34.9 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life, long-term care and disability plans, and medical management capabilities. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans and government-sponsored plans. www.aetna.com.