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Closing of Acquisition of Insurers Administrative Corporation Positions Independence Holding Company to Benefit From Expansion of Health Savings Accounts (HSAs)

Posted on: Wednesday, 1 February 2006, 15:00 CST

Independence Holding Company (NYSE: IHC) today announced that it closed yesterday on the acquisition of Insurers Administrative Corporation ("IAC"). IAC is a leading distributor and manager of Consumer Driven Health Plans (CDHPs) with more than $220 million of individual and group health and life premiums and premium equivalents that insure more than 125,000 covered lives.

CDHPs are often sold in conjunction with Health Savings Accounts (HSAs), which were the domestic health focal point of the State of the Union address last night. President Bush called for expansion of HSAs through a variety of initiatives, including increasing the tax advantages for HSAs and HSA compatible health insurance plans. The number of persons covered by CDHPs tied to HSAs has nearly tripled over the past 10 months to more than 3 million, according to new data compiled by America's Health Insurance Plans, a Washington D.C. based research group. It is estimated that CDHP enrollment will reach 12 million participants (7% of the commercially insured market) by 2007 and soar to 24% of that market by 2010.

Scott Wood, newly appointed Co-Chief Operating Officer of IHC, commented, "HSAs have been referred to as 'healthcare 401(k)s.' 401(k) accounts revolutionized the way in which consumers control the investment of their retirement funds, and we believe that HSAs can have the same impact on the way in which consumers control the spending of their health dollars. IHC is prepared for this evolution in healthcare financing through an innovative array of heath plan programs and readily scaleable 'in-house' administrative capabilities. Our CDHPs allow employers and individuals the flexibility to transition to HSA plans through proprietary dual health plan offerings and Health Savings Accounts or Health Reimbursement Arrangements (HRAs). For more information about HSAs and HRAs, please visit us at www.iacusa.com."

About Independence Holding Company

IHC is a holding company principally engaged in the life and health insurance business and the acquisition of blocks of policies through its insurance company subsidiaries (Standard Security Life Insurance Company of New York and Madison National Life Insurance Company, Inc.), its affiliate (American Independence Corp. (NASDAQ: AMIC)), and its managing general underwriters, third party administrators, and marketing affiliates. Standard Security Life markets medical stop-loss, long-term and short-term disability, employer-sponsored group major medical, short-term medical, group life, dental, vision and managed health care products. Madison Life sells group life and disability, employer medical stop-loss, employer-sponsored group major medical, short-term medical, dental, vision, credit life and disability and individual life insurance. AMIC is a holding company principally engaged in the insurance and reinsurance business through Independence American Insurance Company and its managing general underwriter division.

Some of the statements included herein may be considered to be forward looking statements which are subject to certain risks and uncertainties. Factors which could cause the actual results to differ materially from those suggested by such statements are described from time to time in IHC's filings with the Securities and Exchange Commission.

Source: Business Wire

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