News Release

Benefit Resource, Inc. Creates CFO Position in Response to Remarkable Growth

June 19, 2005

Benefit Resource, Inc. has named Charles A. Callahan to the company’s newly created position of Chief Financial Officer. Callahan comes to Benefit Resource from Newtex Industries, Inc., where he was Vice President of Finance and CFO.

Callahan is also the former Vice President of Finance and CFO of World of Science, Inc. During his tenure there, the company enjoyed significant growth, expanding from a regional company with 250 employees to a national enterprise with more than 2,000 employees. Callahan managed the company’s successful initial public offering and its sale.

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“We believe Chuck’s experience with corporate expansion and national markets and his particular understanding of IPOs will serve Benefit Resource well as our company meets the challenges posed by a rapidly growing customer base and expanding network of service,” company President Tony DiBarnaba said in making the announcement.

“Since its founding in 1993, Benefit Resource has enjoyed double- and triple-digit annual growth,” DiBarnaba said. “We expect that growth to continue and that we will double sales over the next two years.” Benefit Resource currently administers pre-tax employee benefit plans for more than 100,000 employees and 1,000 employers in Upstate New York, New York City, Boston, Chicago, Philadelphia and Washington, D.C. In each of the past two years, Benefit Resource has been named to Rochester’s Top 100, a list of the fastest-growing privately owned companies in the Rochester, NY, area. The list is co-sponsored by the Rochester Business Alliance and KPMG.

Benefit Resource administers benefits made possible under IRC Section 125 and IRC Section 132(f). The plans allow employees to set aside pre-tax dollars to pay for medical care, dependent care and mass transit. Benefit Resource pioneered the paperless administration of pre-tax employee benefits. The company is the leader in card technology for pre-tax employee benefit plans and has allied with MasterCard International to streamline plan administration, reducing overhead costs for employers and improving convenience and security for employees. The company administers the eTRAC® Commute plan providing pre-tax transit and parking benefits to workers.

The eTRACCommute plan incorporates the prepaid eTRACMasterCard® card, providing convenient, secure, low-overhead administration of pre-tax employee benefit accounts for qualified mass transit and parking expenses. Employees designate payroll contributions – in pre-tax dollars – to their transit accounts and use the eTRACMasterCard to automatically access those accounts to pay for mass transit and parking expenses. Workers can enroll and manage their accounts on-line.

Benefit Resource’s patent-pending software ensures that tax-free dollars stored on an eTRAC MasterCard can be used only for eligible purchases.

Benefit Resource also uses the MasterCard stored value solutions to administer flexible spending accounts. These FSA cards automatically reduce flex account balances as participants use their cards to pay for health services and dependent care – no claim-reimbursement forms, no cash. “The approach puts more money in the hands of employees and broadens their choice in health care services,” DiBarnaba says. “And, of course, it eliminates paperwork.”

Pre-tax employee benefit plans have recently become a hot topic in the marketplace. “Shortly after they were created, ‘flex’ accounts were considered a nice addition to employee benefit packages,” says Tom Guiler, vice president of Benefit Resource. “However, in recent years, steep increases in the cost of offering employee benefits, particularly health care, have made pre-tax benefit accounts a necessity – for both employers and their employees.”

Participating employees can reduce their out-of-pocket medical, day care and mass transit expenses by 30 to 40 percent. Employees who choose to reduce premium costs by choosing health plans with higher co-pays can use pre-tax dollars to reduce the out-of-pocket cost of those larger co-pays. At the same time, employers can reduce payroll taxes on the amount their employees contribute to pre-tax accounts.

“What may be most important is that advances in technology, including advances we’ve made in card technology, have made it possible to eliminate the costly paperwork burden once associated with pre-tax benefits plans,” Guiler says. “Employee accounts are more convenient and secure. And, by using MasterCard-branded prepaid cards, employees can now get full value from their pre-tax contributions. As a result, companies that once spurned flexible spending accounts have come back into the marketplace.”

“The response to our service and technology has been very positive,” DiBarnaba says. “As more companies realize the advantages of offering pre-tax benefits and as terms like Health Savings Account (HSA) and Health Reimbursement Arrangement (HRA) become part of our everyday vocabulary, we expect to be very busy. We are delighted that Chuck is part of our team as we move forward.”

Callahan is a member of the Institute of Management Accountants and a 1971 graduate of Niagara University. A Rochester-area native, he is a Trustee of Grace Baptist Church in Irondequoit and lives in Webster with his wife, Joan. The couple has four grown children and six grandchildren.

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Benefit Resource, Inc. (www.BenefitResource.com) administers pre-tax employee benefit plans for more than 100,000 employees and 1,000 employers in Upstate New York, New York City, Boston, Chicago, Philadelphia and Washington, D.C. Unlike payroll or human resource companies, Benefit Resource focuses solely on administration of tax-free benefits. When there’s a question about pre-tax benefits – for health care, dependent care or transportation, Benefit Resource is the expert.