A Commitment to Quality

This is our 32^nd year. Much has changed since 1975, but there is one constant - our ongoing commitment to deliver cost-effective creative solutions and exceptional personalized service to you and your employees. Three years ago we recommitted to enhanced technology, security, and exceptional customer service. We continue to deliver on that service commitment by directing financial and human resources to each of those key areas.

For 2008, we will once again be rolling out a set of new and improved client and participant systems, interfaces and enhancements. Outlined below are improvements to look for over the coming months:

• Transition to a web-based billing system – offering both COBRA and Direct Billing clients and participants secure access to information and tools.
  
  
• Introduction of "online claims submission" through MyCrosbyBenefits.com – allowing participants to enter expense items and upload images of receipts/bills directly through our secure web-portal.
  
  
• Introduction of our "employer extranet" – which will offer clients a secure website to deliver and receive information. This will allow for a secure yet easy option for report retrieval and storage.
  
  
• Introduction of "pay the provider" – which will allow reimbursement participants the option of having payments from an FSA or HRA be made directly to the service provider, creating less of a drain on take-home pay.

These enhancements, and others, are part of our continuing effort to strengthen and improve our network and overall technology foundation. This is closely tied to other infrastructure development that includes security analysis and disaster recovery/business continuity planning.

During 2007, we have completed Phase I of our SAS70 testing. The final report for Phase I will be available soon. Over the course of 2008, we will conduct testing for SAS70 Phase II which is scheduled to be completed next fall.

I look forward to hearing from you. While we are extremely focused on developing and improving our company, your input is critical to our continued success. Please contact me at any time via my direct number 617-630-0423 or hcrosby@crosbybenefits.com.

Sincerely,

Harvey J. Crosby
President

The threat of a natural disaster interrupting business services is a reality for any company during any season, but especially during these winter months. Please be assured that Crosby has developed and tested its Disaster Recovery Plan and when necessary, makes updates accordingly. We consider readiness planning to be an important component of our overall operations – be it power outages affecting our communications and technology, or building closure due to damage.

In the event of business interruption, plans are in place to continue operations from several locations with the least amount of disruptions to schedules and priorities. Every effort will be made to communicate the situation and status to our customers, and to be available via phone or email to answer your questions. As a daily business practice, all Crosby customer data is maintained with industry standards for security and daily off-site back-up arrangements. Furthermore, all payments are handled off site through our bank, and funding transactions are included in the daily back-up off-site storage arrangements.

The IRS has updated the standard mileage rate for medical care for 2008. The mileage limit for automobile usage for a medical purpose under Code Section 213 (traveling to/from a medical appointment) will be $0.19 per mile. This is a one cent decrease from the 2007 rate.