GREEN BAY, Wis.--(BUSINESS WIRE)--June 16, 2004--Associated Bank, in conjunction with its insurance and human resources consulting affiliate, Associated Financial Group, is offering employers a unique version of a new medical benefit program that gives their employees more control over their health expenses, provides tax benefits, and can save money.

The program, called the Engage Health Savings Account Solution, was made possible through federal legislation earlier this year.

A Health Savings Account (HSA) coverage plan consists of a high deductible health insurance plan linked with a savings account that offers considerable tax advantages. The Engage HSA Solution, currently offered through employers working with Associated, gives consumers complete control over spending for their own medical expenses.

Associated's program is unique because it is the only HSA package in Associated's markets to provide employers with the value of an independent insurance agency together with a bank. This means employers and their employees will get the benefit of competitive bidding among insurance carriers while keeping their health savings account in place if the employer changes insurance carriers.

HSA funds can be used for a wide range of medical, eye care and dental expenses not covered by insurance. In this way HSAs are similar to the flexible spending accounts that have been around for years.

But HSAs are different from flex accounts in several important ways.

    --  First, the money can be rolled over from year to year, and HSA
        balances move with an employee if he or she changes jobs.

    --  Second, HSA funds can be used for a wider range of
        health-related products and services.

    --  Third, because HSA funds can grow over a period of years, they
        may, over time, earn significant interest, which accrues
        tax-free.

    --  Fourth, any unused balance accumulated at retirement can be
        used for retirement income, like an IRA, or for long-term care
        costs.

    --  Fifth, under the law HSAs must be used in conjunction with a
        high-deductible health plan (HDHP) that does not provide any
        benefits before the deductible is met, other than preventive
        care coverage. A high deductible health plan is defined as one
        with a deductible of at least $1,000 for single coverage and
        at least $2,500 for family coverage.

The Engage HSA Solution from Associated allows participants to use a VISA debit card, ATM or checks to access their HSA funds for many medically related expenses. Charges from doctors' office visits are submitted to the insurance carrier as with a normal insurance plan, and the insurance company pays bills from the participant's HSA as appropriate, until the deductible is met.

"The HSA is an extremely attractive alternative because it gives consumers the power to control their health care spending as they see fit. As a result, HSA participants are likely to reduce their overall health care expenses. Additionally, the ability to accumulate savings for future health, retirement or long-term care expenses provides a significant advantage over traditional health funding alternatives," said Bill Bohn, CEO of Associated Financial Group.

"As employers begin to understand and ask about an HSA alternative as part of their employee benefit package, Associated is well-positioned to meet their needs. We have the consulting expertise for design, communication and implementation, the insurance agency and carrier relationships to place the HDHP and the banking and investment tools for the program all in-house. Given our full range of employee benefit services along with business banking and investment services, we are ideally positioned to provide a one-stop financial services resource to business in Wisconsin and Minnesota and Illinois," he said.

Often, lower premiums on a high-deductible health plan mean both the employee and the employer have more funds available to contribute to an HSA. Longer term, because consumers will be conscious of the medical costs, the hope is that medical providers will be more cost-conscious and more competitive in their pricing.

Additionally, while consumers are free to spend their HSA dollars with any medical provider they choose, they can benefit from significant discounts their insurance carrier negotiates with certain doctors and hospitals.

"Beyond the direct benefits to our client's employees, we hope and expect the widespread use of HSAs will stimulate greater competition and more efficient use of health care resources in our communities. The HSA gives consumers considerable incentive to compare costs among providers and treatment options," Bohn said.

Associated Bank and Associated Financial Group are affiliates of Associated Banc-Corp (Nasdaq:ASBC). Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified multibank holding company with total assets of $15.5 billion, serving Wisconsin, Illinois, and Minnesota through more than 200 banking offices. Associated offers a full range of traditional banking services and a variety of other financial products and services. More information about Associated Banc-Corp is available at www.AssociatedBank.com.

Statements made in this document that are not purely historical are forward-looking statements, based on current management expectations. Outcomes related to such statements are subject to numerous risk factors and uncertainties including those listed in the company's Annual Report filed on Form 10-K.

    CONTACT: Associated Banc-Corp
             Jon Drayna, 920-491-7006
             or
             Associated Financial Group
             Bill Bohn, 920-491-7003

    SOURCE: Associated Banc-Corp