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QUAL-MED TEAMS WITH EMPLOYERS HEALTH INSURANCE IN JOINT VENTURE

 PUEBLO, Colo., March 10 /PRNewswire/ -- Qual-Med Inc. (NASDAQ-NMS: QLMD) and Employers Health Insurance Co., an affiliate of Lincoln National Corp. (NYSE: LNC), have signed definitive agreements that will allow the two companies to jointly market multiple option managed health care and related products to small businesses in Northern California. These agreements are subject to regulatory approvals and to completion of certain product implementation tasks.
 These multiple option products (MOP) will present employees of small businesses with the opportunity to choose from among health maintenance organization (HMO) plans, exclusive provider organization (EPO) plans, and preferred provider organization (PPO) plans in locations where those plan combinations are offered. In addition, the agreements permit Qual-Med to offer other products underwritten by Employers Health including group term life, dental and disability insurance as well as flexible benefit plans. Additional markets where MOP and related products will be offered may be added at later dates.
 Under this strategic partnership, both Qual-Med and Employers Health will have a stake in the financial success of the multiple option product offerings. Specific terms of the agreements were not disclosed.
 Dr. Malik M. Hasan, chairman, president and chief executive officer of Qual-Med said, "The 'managed competition' health care models being discussed at the state and federal levels provide unprecedented opportunities for organizations like ours, and we could not ask for a better partner with which to develop small group products than Employers Health.
 "The vital components for this effort are superior medical management capabilities and extensive networks of high quality providers, which are offered by Qual-Med," Hasan added. "Employers Health brings extensive experience in the small group market and an enviable distribution system."
 "Qual-Med brings to this relationship its strong intensive medical management system combined with quality, cost-effective provider networks. Employers Health brings its proven capabilities in the small employer market and its reputation for customer service. The combination makes this partnership a formidable competitor going forward," said Employers Health President and Chief Executive Officer William J. Lawson.
 "Employers Health has long recognized the massive restructuring taking place in today's health care marketplace, and we have carefully positioned ourselves for change," Lawson added. "By embarking on new strategic ventures such as this, we are positioned to capitalize on new opportunities that call for flexibility in the changing small employer market."
 Both companies view the strategic partnership as an effective way to provide cost-effective health care coverages for small employers (groups with 3-150 employees) in a reforming marketplace. On July 1, California's new small group reform law, AB 1672, goes into effect. It requires insurance carriers to offer products on a guaranteed issue basis. This law further limits carriers' ability to rate groups using traditional underwriting criteria.
 The California Major Risk medical Insurance Board recently named Employers Health the administrator for California's new health insurance purchasing program, which is designed to give small employers the same leverage in purchasing health care benefits as larger employers have and to bring the coverage decisions directly to the consumer.
 The relationship between the two companies began in December 1992 when Employers Health contracted with Qual-Med subsidiary Preferred Health Network Inc. of Long Beach, Calif. to use its extensive multi- state provider networks for Employers' PPO plans.
 Currently, QualMed Plans for Health, Qual-Med's California HMO subsidiary, has more than 172,000 members in California. Employers Health has more than 100,000 members in the state, who may become eligible for the new multi-option product. In the large group market (more than 150 employees), Qual-Med offers its own multiple option product developed around QualMed Plans for Health HMOs and PPO and managed indemnity products offered through QualMed Health & Life Insurance Co.
 Qual-Med, headquartered in Pueblo, had annual revenues of over $436 million in 1992. The company provides comprehensive managed health care products and services to more than 333,000 members in California, Colorado, Idaho, New Mexico, Oregon and Washington. Through its subsidiary, Preferred Health Network, the company provides access to preferred provider networks for more than two million covered persons.
 Employers Health Insurance, based in Green Bay, Wis., provides health care benefits to groups of all sizes in Wisconsin and to groups of two to 150 employees nationwide. The ninth largest group health insurer in the nation, Employers also provides a wide range of other employee benefits. Employers Health is a part of Lincoln National.
 -0- 3/10/93
 /CONTACT: Jerry Davis of Qual-Med, 719-542-0500; or Jon Drayna of Employers Health Insurance, 414-336-5725/
 (QLMD LNC)


CO: Qual-Med Inc.; Employers Health Insurance Co.; Lincoln National
 Corp. ST: Colorado, California, Wisconsin IN: HEA SU: JVN


BB -- DV010 -- 8565 03/10/93 13:29 EST
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Date:Mar 10, 1993
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