SHPS Wins COBRA Administration Contract with Federated Department Stores.

Business Editors

LOUISVILLE, Ky.--(BUSINESS WIRE)--March 29, 2004

SHPS, Inc., an integrated health management provider, announced today that it has been chosen to provide COBRA Administration services for Federated Department Stores, Inc., the nation's largest upscale department store retailer. Federated operates more than 450 stores in 34 states, Puerto Rico, and Guam under names such as Macy's, Bloomingdale's, Lazarus-Macy's and Rich's-Macy's.

"We are pleased to have an opportunity to meet the needs of Federated's COBRA requirements," said Jack Johnsey, SHPS Vice President of Sales. "With people changing jobs more frequently, HR professionals see tremendous value in outsourcing COBRA and retiree services so they can focus on strategic corporate initiatives."

Federated made the decision to outsource to SHPS after a careful review of the company's product offerings and operations.

"SHPS presented a comprehensive end-to-end solution that manages multiple plan designs on the back end with a simple, effective customer interface that satisfies the needs of COBRA continuants," said Alex Bleckert, Vice President, Benefits Services for Federated. "We felt comfortable with their extensive experience providing COBRA administration as well as their technology solutions."

The SHPS COBRA solution includes an online payment service allowing former employees to pay for COBRA premiums securely over the Internet. This online, self-service option delivers convenience to users and processes payments faster by automatically debiting a user's checking account.

Participants simply access the SHPS web site to use SHPS' online payment option without installing software on their computer. They have immediate and unlimited access to detailed account status, preventing them from having to contact a Federated benefits coordinator for information. SHPS also provides an automated voice response system for account status and live customer support service from 8 a.m. to 8 p.m. EST .

"While the administrative cost for providing services to people no longer employed with a company can be significant for that company, it is the administrative compliance with COBRA regulations that is complicated and more potentially damaging from a financial standpoint if a company fails to comply," stated Johnsey. "Part of the value we bring to Federated and other COBRA customers, is our internal quality assurance team, individuals dedicated to keeping informed of regulatory issues while continuously monitoring existing processes for compliance."

SHPS has more than 15 years experience in providing COBRA administration services to mid-sized and large private and public sector enterprises, including more than 70 Fortune 500 companies.

About Federated Department Stores, Inc.

Federated, with corporate offices in Cincinnati and New York, is one of the nation's leading department store retailers, with annual sales of more than $15.2 billion. Federated operates more than 450 stores in 34 states, Guam and Puerto Rico under the names of Macy's, Bloomingdale's, Bon-Macy's, Burdines-Macy's, Goldsmith's-Macy's, Lazarus-Macy's and Rich's-Macy's. The company also operates www.macys.com and Bloomingdale's By Mail.

About SHPS, Inc.

SHPS, Inc., an integrated health management provider headquartered in Louisville, KY. With services that include strategic consulting, benefits administration, and care management, SHPS provides corporations and consumers with a single, comprehensive source of health management decision guidance. The company serves nearly 900 organizations, including more than 90 Fortune 500 companies and employs more than 2,000 clinical professionals, employee benefits specialists, and information technology experts in facilities across the United States. SHPS is a Welsh, Carson, Anderson & Stowe company. WCAS a private equity firm based in New York. For more information, visit www.shps.net and www.welshcarson.com.