[HEALTHEXTRAS, INC. LETTERHEAD]


FOR IMMEDIATE RELEASE                        Contact:  Michael Donovan
- ---------------------                                  mdonovan@healthextras.com
                                                       HealthExtras, Inc.
                                                       (301) 548-2900

    HEALTHEXTRAS ANNOUNCES ACQUISITION OF PHARMACY BENEFIT MANAGEMENT COMPANY

         ROCKVILLE, MD, JUNE 22, 2004 -- HEALTHEXTRAS, INC. (NASDAQ: HLEX-NEWS),
today announced the acquisition of Managed  Healthcare  Systems Inc.  ("MHS") of
Oakland Park, Florida. MHS is a provider of pharmacy benefit management services
for a diverse  base of clients  including  self-funded  employers,  third  party
administrators and local government agencies.

         "The  MHS  transaction   meets  our  stated   strategic   objective  of
complementing  strong  organic  PBM  growth at  Catalyst  Rx with the  selective
acquisition of complementary businesses," stated David T. Blair, Chief Executive
Officer  of  HealthExtras.   "Consistent  with  our  acquisition  criteria,  the
transaction will be accretive on a consolidated basis and will allow the Company
to offer a significantly enhanced combination of group and workers' compensation
PBM programs to clients and prospects."

         Ken Sack,  President  of MHS said,  "We believe this  transaction  with
HealthExtras  will  allow  us to grow  our  business  and  enhance  our  product
offerings while providing our clients with the same high level of service by the
same team from our Oakland Park office.  We are  particularly  pleased about the
cross-marketing  opportunities  that exist  between our  organizations,  and the
expanded sales force that HealthExtras has in place across the country."

         On a consolidated  basis, MHS will contribute  modestly to HealthExtras
revenues and earnings for 2004. Following an integration process which should be
completed  no later than the second  quarter of 2005,  the  acquired  businesses
should produce approximately $.08 to $.10 per share in incremental earnings. The
timing and extent of MHS's  contributions to consolidated  revenues and earnings
for 2004 and 2005 will be addressed in the Company's next  quarterly  conference
call.  The details of the up to $44 million cash and stock  transaction  will be
described in the Company's  required  filings with the  Securities  and Exchange
Commission.  The significant majority of the purchase consideration consisted of
cash,  which was funded  through the  Company's  recently  expanded  $50 million
commercial credit facility.

ABOUT HEALTHEXTRAS (WWW.HEALTHEXTRAS.COM)
                    --------------------
HealthExtras,  Inc., a pharmacy benefit management  company,  currently provides
benefits to over two million  members and the Company's  clients include managed
care  organizations,  large employer  groups,  unions,  government  agencies and
individual  consumers.  The Company's  integrated  pharmacy  benefit  management
services marketed under the name Catalyst Rx include:  claims  processing,  mail
order services, benefit design consultation,  drug utilization review, formulary
management and drug data analysis services. Additionally, the Company operates a
national retail pharmacy network with over 53,000 participating pharmacies.

This press release may contain forward-looking  information. The forward-looking
statements  are made  pursuant  to the safe  harbor  provisions  of the  Private
Securities   Litigation   Act  of  1995.   Forward-looking   statements  may  be
significantly   impacted  by  certain  risks  and  uncertainties   described  in
HealthExtras' filings with the Securities and Exchange Commission.

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