American Family Insurance Introduces High Deductible Health Plan 

Madison, Wis. (Sept. 29, 2005) — Moving to meet strong consumer demand, American Family Insurance has added a qualified high-deductible health plan (HDHP) to its line of health insurance products, the Madison-based insurer said today.

“We are excited about this new option for our customers,” said Jeff Bosco, American Family vice president. “When you consider the public outcry for more affordable health insurance, we see a huge potential for growth.”

High-deductible health plans coupled with health savings accounts (HSAs) are becoming increasingly popular in the health insurance market. A Forrester Research report predicts consumer-driven health plans, including HSAs, will have 2.7 million members by the end of 2005 and as much as 24 percent of the health insurance market by 2010.

High-deductible health plans allow consumers to pay less premium, and contribute those savings to interest-earning HSAs. They can then use their HSAs to pay for qualified medical expenses below the deductible or those not typically covered by a health plan.

If customers don’t use all of their HSA funds during a year, they can roll over the balance from year to year, and it will continue to grow tax-free. There is no “use it or lose it” rule with an HSA as there is with a flexible spending account.

HDHPs meet certain federally required criteria, including deductibles starting at a minimum of $1,000 for an individual or $2,000 for a family, and maximum out-of-pocket expenses of $5,100 for an individual or $10,200 for a family.

Bosco said the high-deductible health plan is a great fit for American Family. “We think the appeal of this product goes beyond people who don’t have access to a group health plan, but also to small business owners, the self-employed and farm families, people who are already familiar with American Family through our commercial and farm/ranch insurance products,” he said.

The American Family HDHP is available in 14 of its 17 operating states: Arizona, Colorado, Kansas, Illinois, Indiana, Iowa, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Oregon, South Dakota and Wisconsin. The product is not available in the Idaho, Nevada and Utah.