Blue Cross and Blue Shield of Georgia Establishes High Deductible Health Plans Designed to Be Compatible with Health Savings Accounts for Individuals.

Business Editors

ATLANTA--(BUSINESS WIRE)--Feb. 13, 2004

Consumers Given More Accountability for Their Health Care Spending

Blue Cross and Blue Shield of Georgia (BCBSGA) today announced it will be offering High Deductible Health Plans (HDHPs) that are designed to be compatible with Health Savings Accounts (HSAs) to individuals and employees. HSA-enabling legislation became effective as part of the Medicare Prescription & Modernization Act signed by President Bush on December 8, 2003.

HSAs are the latest "consumer-driven" strategy for managing the rising costs of health care expenses. HSAs allow individuals and families who have a qualified High Deductible Health Plan (HDHP), to put aside money in a tax-exempt HSA account to cover qualified medical expenses. Individuals who purchase or enroll in an HDHP can make a pre-tax annual contribution to an HSA of up to $2,600 with families allowed a maximum contribution of $5,150. Individual purchasers are not eligible for an HSA if they qualify for Medicare, are covered under another person's tax return or are covered as an individual, spouse or dependent under another comprehensive health plan that is not an HDHP. Employers may make part or all of these allowable contributions on behalf of their employees and covered dependents only if they are enrolled in a qualified HDHP and meet all other eligibility requirements. HDHP plans are defined as health plans with at least a $1,000 deductible for individuals with an out-of-pocket maximum of $5,000 or a $2,000 deductible for a family with an out-of-pocket maximum of $10,000 (including deductible, coinsurance and copay amounts). Qualified medical expenses are any health care costs as defined by the Internal Revenue Code (IRC Section 213)(d) that are not covered by insurance. For employees, an employer must offer an HDHP that is compatible with an HSA. HSA advantages include:

-- Contributions are tax deductible

-- Interest on an HSA account is tax-deferred

-- HSA withdrawals can be used to pay for qualified medical

expenses

-- HSAs are portable and owned by the individual, contributions

cannot be taken away

-- Unspent balances carry over and can accumulate over a lifetime

to be used at retirement to pay for uncovered Medicare

expenses. (However, consumers may not contribute once they

reach age 65.)

-- HSAs may be passed on to beneficiaries tax free - if the

account holder should pass away

More detailed information will be provided by BCBSGA through its web site and marketing areas in the next 45 - 60 days.

In According to John Watts, president of Blue Cross and Blue Shield of Georgia, "Providing consumers with options to manage their health care spending will continue to be an important component of our industry as the landscape changes and costs continue to escalate. Health savings accounts are yet another important building block in this evolution and we are pleased to begin offering them as an option."

Blue Cross and Blue Shield of Georgia High Deductible Health Plans are not HSAs. The HSAs, which must be established for tax-advantaged treatment, are a separate arrangement between the individual and a bank or other qualified institution. You must be an eligible individual under IRS regulations to receive HSA tax benefits. The IRS has not yet issued HSA or High Deductible Health Plan regulations or determined that Blue Cross and Blue Shield of Georgia High Deductible Health Plans are qualified. Consultation with a tax advisor is recommended.

Blue Cross and Blue Shield of Georgia, which serves more than 2.3 million medical members, is the oldest and largest health benefits company in Georgia. Blue Cross and Blue Shield of Georgia is an operating subsidiary of WellPoint Health Networks Inc., one of the nation's largest publicly traded health care companies serving the health care needs of more than 14 million medical members and more than 44 million specialty members nationally. WellPoint offers a broad spectrum of quality network-based health products including open access PPO, POS and hybrid products, HMO and specialty products. Specialty products include pharmacy benefit management, dental, utilization management, vision, mental health, life and disability insurance, long term care insurance, flexible spending accounts, COBRA administration, and Medicare supplements. Blue Cross and Blue Shield of Georgia can be found on the web at www.bcbsga.com. Blue Cross and Blue Shield of Georgia is an independent licensee of the Blue Cross and Blue Shield Association.