Healthy Employees Bring Financial Rewards

October 11, 2007 (Des Moines, Iowa) — The Principal Financial Group^®, the nation's premier provider of employee benefits, introduces an integrated health improvement program designed to reward and encourage good health. The program combines a traditional health insurance policy with a wellness program, creating the potential for significant savings on deductibles and copayments for employees who participate. Employers benefit from reduced health care coverage costs and a healthier, more productive work force.

"Being healthy should save health care costs, but today everyone has the same benefit, meaning the unhealthy benefit more because they often utilize more services. With this new product we leveled the playing field, giving all employees a chance to improve their health - and reap the financial rewards," said Jerry Ripperger, director of consumer health for the Principal Financial Group. "Healthy employees are essential in fighting our health crisis. Empowering employees to improve their health is quite simply a smart business decision."

Savings for employers could reach 6 percent of their total health insurance costs for those implementing the new benefit program. Employees also experience savings and the opportunity to make achievable changes to their health by working with a wellness coach. The standard coverage will be the same for all employees however those who participate in the required wellness program and meet certain criteria will receive a reduction on deductibles and copayments.

Here's how the program works:

All employees automatically receive savings on deductibles and copayments for the first three months of coverage. During that time, each covered employee and his or her covered spouse/partner will be required to complete a health risk assessment and wellness screening in order to continue receiving the savings.
The results will be analyzed by Principal Wellness Company and evaluated according to a standard set of criteria. Individual results will be kept confidential, but employers will receive an aggregate report of all employees.
Employees who meet a minimum score requirement continue to receive the savings.
Those who do not meet this requirement will be given options for making achievable health improvements in order to receive the same savings. They will also have the opportunity for personalized consulting from a health coach.
The plan premium is the same for all participants.

"We know wellness works and now we have a new way to show the value of maintaining good health for employers and their employees," said Audrey Vaughn, second vice president of wellness and medical management for The Principal. "This is not just a reward for the healthy. Those who are not as healthy really benefit most. Not only do they receive a reduced rate if they're willing to make health improvements, they also get personalized consulting with one of our health coaches to help them achieve a healthier lifestyle."

The product is currently being offered to fully insured and self-funded groups in Michigan and Iowa. A Principal Wellness consultant works directly with the employer to develop a program that works best for their specific organization. Employers will also receive a wellness evaluation and ideas on how to improve overall company health through things like a smoke-free facility.

"This is an exciting evolution of consumer driven healthcare. We've been empowering employees to take an active role in their health and now we have one more way to reward those who keep that promise," said Ripperger.

About Principal Wellness Company

Principal Wellness Company promotes prevention as a key factor in addressing looming health care costs by providing onsite health and wellness screenings including overall wellness program development, private member consultations and personalized high-risk interventions. Wellness services from Principal Wellness Company are available to any employer interested in keeping health costs down by motivating employees to become actively involved in staying healthy.

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About the Principal Financial Group

The Principal Financial Group^® (The Principal^®)¹ is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies and national network of financial professionals. A member of the Fortune 500, the Principal Financial Group has $282.1 billion in assets under management² and serves some 18.1 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.

1) "The Principal Financial Group" and "The Principal" are registered trademarks of Principal Financial Services, Inc., a member of the Principal Financial Group.
2) As of June 30, 2007.