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HEALTHSOURCE CLOSES PURCHASE OF INDIANA HMO

 HEALTHSOURCE CLOSES PURCHASE OF INDIANA HMO
 CONCORD. N.H., May 4 /PRNewswire/ -- Healthsource, Inc.,


(NASDAQ: HLTH), a leading operator of HMOs and managed health care services, announced today that it has closed (effective as of May 1, 1992) its previously announced agreement to acquire the preferred provider group health and group life insurance business and the HMO subsidiary of the United Farm Bureau Family Life Insurance Company (UFB-FLIC). Under the terms of the agreement and subject to various adjustments, Healthsource will pay approximately $7 million in total consideration for the purchase allocated as follows: approximately $4 million to UFB-FLIC as consideration for the purchase, and approximately $3 million set up as a claims reserve in Healthsource's newly licensed Indiana insurance subsidiary to cover claims liabilities acquired from UFB-FLIC as part of the purchase. In addition, Healthsource will contribute approximately $2 million to capitalize the new wholly-owned Indiana insurance company subsidiary. Subsequently, additional capital may be necessary to meet the requirements of the Indiana Department of Insurance and the proposed NAIC guidelines.
 The HMO subsidiary of UFB-FLIC currently has approximately 21,000 members and more than $25.9 million in 1991 annual revenues. The group insurance business currently consists of approximately 20,000 insured members with 1991 annual revenues of $28 million. Both the HMO and group insurance businesses provide services statewide in Indiana.
 Norman C. Payson, M.D., chief executive officer of Healthsource, Inc. said., "We are very excited about the purchase of UFB-FLIC's group health businesses. We will look forward to working closely with Indiana health care providers to develop a sizeable managed care business in the relatively underpenetrated Indiana market."
 Healthsource, Inc. sponsors or manages HMO's in New Hampshire, Maine, North Carolina, South Carolina, Tennessee and New York and owns EBPA, the largest third-party claims administrator in New England. Healthsource also provides utilization review services and preferred provider networks primarily to self-insured employer plans and Blue Cross and Blue Shield of Vermont.
 -0- 5/4/92
 /CONTACT: Thomas Congoran or Tracey Turner of Healthsource, 603-225-5077, or Kerry Thalheim, 212-661-8030,or Kathy Waller, 312-266-7800, at the Financial Relations Board, Inc./
 (HLTH) CO: Healthsource ST: New Hampshire IN: HEA SU:


TM -- NE026 -- 6188 05/04/92 16:10 EDT
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Publication:PR Newswire
Date:May 4, 1992
Words:369
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