Debit Card Adds Convenience, May Boost Appeal of FSAs

MARLBOROUGH, Mass., August 20, 2003 - Fidelity Investments has introduced a debit card payment option for corporations that use its outsourcing services for their health care flexible spending accounts (FSAs). The electronic payment option allows flexible spending account participants to pay for qualified out-of-pocket health care expenses with the swipe of a card at the time of the transaction.

The new debit card, which is available now to Fidelity's outsourcing clients, reduces participants' burden of submitting receipts and eliminates their having to wait for reimbursements for their eligible health care expenditures. Participants can use the debit card to pay for common recurring out-of-pocket costs such as office visit co-payments and prescription drugs, without having to submit a claim later.

FSAs allow employees to withhold pre-tax dollars from their paychecks to pay for eligible health care expenses that are not covered by their health care plans, such as pharmaceutical items, co-payments, plan deductibles, and certain vision and dental services.

"The new debit card offers increased flexibility and makes using an FSA much more convenient for participants since they will no longer be required to pay for expenses up front and wait for reimbursements," said Surinder Singh, executive vice president of Fidelity Employer Services Company's Health and Welfare Services. "By providing this easy-to-use debit card, we expect more employees to take advantage of health care FSA programs, which allow them to pay for qualified expenses with pre-tax dollars."

At the time of purchase, transactions using the FSA debit card are charged against the participant's personal FSA balance. The electronic payment option employs a new technology that authenticates most charges in real-time at the point of service, making sure ineligible expenses are not processed. For example, when a participant presents an FSA debit card for a prescription drug co-payment, the debit card system electronically matches the charge with the participant's insurance plan co-pay amount, therefore authorizing payment with the debit card.

Fidelity is offering the FSA debit card to help plan sponsors boost FSA participation levels among employees and help remove some of the obstacles that discourage them from enrolling in FSA programs. The debit card helps address issues such as paying up front for uncovered expenses, submitting receipts, filling out claims forms and waiting for reimbursements.

The FSA debit card technology also provides workers with the flexibility to manage their accounts online, day or night. By simply logging into their FSAs via Fidelity NetBenefits®, participants can view their transaction history, monitor their account balance and access educational information and tools.

Fidelity delivers single-click access to a wide variety of employee benefit programs, including 401(k) and pension plans, health, dental and other welfare programs, and payroll information, via the NetBenefits^SM site.

Through the Fidelity Workplace Services offering, Fidelity Investments provides human resources administration and employee benefits solutions to more than 14 million participants in more than 11,500 retirement, pension, health and welfare, payroll and stock plans as of December 31, 2002.

About Fidelity

Fidelity Investments is one of the world's largest providers of financial services, with custodied assets of $1.6 trillion, including managed assets of $889.9 billion as of July 31, 2003. Fidelity offers investment management, retirement planning, brokerage, human resources and benefits outsourcing services to 18 million individuals and institutions as well as through 5,500 financial intermediaries. The firm is the largest mutual fund company in the United States, the No. 1 provider of workplace retirement savings plans, one of the largest mutual fund supermarkets and a leading online brokerage firm. For more information about Fidelity Investments, visit www.fidelity.com.

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Fidelity Employer Services Company, a division of Fidelity Investments
Institutional Services Company, Inc., 82 Devonshire Street, Boston, MA 02109.