Louisville, Ky. (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 macys.com and Bloomingdale's By Mail.

About SHPS
SHPS provides a broad range of innovative health management tools, resources and services that empower consumers to make wise healthcare decisions. With comprehensive services that transform consumer health behaviors, SHPS’ integrated delivery system maximizes the value of consumers’ and employers’ healthcare dollars. Among its many clients, SHPS serves large and mid-sized employers, health insurance carriers, third party administrators, Medicare Part D providers and government agencies. The company employs registered nurses and health professionals, employee benefit specialists and IT experts in facilities across the United States. Visit www.shps.com.

For More Information
Sarah Bovine
Director, Corporate Communications
sarah.bovine@shps.com

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