Principal Financial Group Announces Principal Reimbursement Arrangement; Consumer Driven Healthcare Design Supports America’s Growing Businesses In Protecting Employees

DES MOINES, Iowa, Feb. 3, 2004
 
The Principal Financial Group(R), the nation's 401(k) leader and premier provider of employee benefits, announces the Principal Reimbursement Arrangement(SM), a solution that makes it easy for owners of small and mid-sized businesses to offer employees a level of medical benefits typically available only to larger employers. In addition, the Principal Reimbursement Arrangement addresses common employer concerns regarding compliance and funding requirements associated with health reimbursement accounts (HRAs).

"The Principal Reimbursement Arrangement is a great option for employers who are looking for more affordable premiums, compared to a traditional insured product without a reimbursement benefit," said Jerry Ripperger, medical product director for The Principal(R). "Employers also limit their risk exposure by avoiding the unpredictable claim liability that comes with a self-funded program or the cash-flow risk of an HRA."

How the Principal Reimbursement Arrangement Works
The Principal Reimbursement Arrangement is part of a group medical insurance benefit design, working alongside the deductible, coinsurance and coinsurance maximum to help members pay for health care services. When the member is responsible for paying a calendar year deductible and/or coinsurance, his or her reimbursement benefit will pay 50 or 100 percent of the covered charge, up to the maximum reimbursement benefit. Unused Principal Reimbursement Arrangement benefits accumulate in future years. Whereas HRA benefits must be funded entirely with employer dollars, the Principal Reimbursement Arrangement is funded through premiums, allowing the employer to determine the portion paid by employees.

"Industry data indicates that employers are expecting at least a 15 percent increase in health care benefit costs, but can absorb only half that. With nine out of 10 employees stating that health insurance is the most important benefit their employer offers, business owners and benefit decision makers must make strategic decisions when it comes to health care benefits - recruitment efforts and employee retention could very well depend on it," noted Ripperger.

Consumer-Driven Benefit Approach
In addition to its other advantages, the Principal Reimbursement Arrangement incorporates consumer driven healthcare tools and services to help health plan members manage costs. Such resources include:

• Health Assessment Tools - Employees can evaluate their overall health and fitness, identify personal risk factors for conditions such as heart disease, obesity and diabetes, and receive information about steps they can take to improve their health.
• Principal Health News(SM) - This online service provides education content, a medical library, health and wellness information and tools, and much more. It's designed to help employees understand health issues and make informed decision about their health.
• Case Management - When faced with serious illness, members have assistance available from a team of skilled nurses who use a holistic approach in working with the member and their healthcare provider(s). This service helps employees navigate the health care system so they can effectively manage their benefits and medical care.
• Disease Management - Members with certain chronic conditions receive comprehensive and specialized assistance in taking steps to control and manager their health care needs and improve their overall health status.

Employees also have access to a secure personal website (www.principal.com) where they can easily find information about their coverage and prescription drug information.

About the Principal Financial Group
The Principal Financial Group(R) (The Principal (R))(1) is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance and mortgage banking through its diverse family of financial services companies. More employers choose the Principal Financial Group for their 401(k) plans than any other bank, mutual fund, or insurance company in the United States(2). A member of the Fortune 500, the Principal Financial Group has $144.9 billion in assets under management(3) and serves some 15 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.

Group medical insurance issued by Principal Life Insurance Company, Des Moines, IA 50392, a member company of The Principal.

(1) "The Principal Financial Group(R)" and "The Principal(R)" are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

(2) CFO Magazine, April/May 2003, based on total plans served in 2002 by insurance companies, banks and investment firms.

(3) As of December 31, 2003. 

CONTACT: The Principal Financial Group, Des Moines
Rhonda Clark-Leyda, 515-247-6634
[email protected]
or
Francie Peterson, 515-235-6422
[email protected]