United States
SECURITIES AND EXCHANGE COMMISSION
  
  Washington, D.C. 20549

FORM
  10-Q

|þ |  | QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF  THE
 SECURITIES EXCHANGE ACT OF 1934      
|- |  | -----------------------------------------------------------------------------------------------
|  |  | For the quarterly period ended: June 30, 2005                                                  
|  |  |                                                                                                
|  |  | OR                                                                                             
|  |  |                                                                                                
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934
|  |  | For the transition period from: _______ to _________                                           

Commission file number: 0-13591HEALTHAXIS INC.(Exact name of registrant as provided in its charter)

|Pennsylvania                                                                  | 23-2214195                                             
|----------------------------------------------------------------------------- | -------------------------------------------------------
|(State or Other Jurisdiction of
        
      Incorporation or Organization) | (I.R.S. Employer
          
        Identification No.)

7301 North
State Highway 161, Suite 300, Irving, Texas 75039 (Address of principal executive
offices) (Zip Code)

Registrant's
telephone number, including area code: (972) 443-5000

Former name,
former address and former fiscal year, if  changed since last report: N/A

Indicate
by check mark  whether the  Registrant  (1)  has filed all  reports  required  to be
filed by Section 13 or  15(d)  of the  Securities  Exchange  Act of  1934  during  the
preceding  12  months  (or for such  shorter  period  that the  registrant  was  required
to file such  reports),  and (2) has  been  subject  to such  filing  requirements  for
the  past 90  days.

|Yesþ | Noo
|---- | ---

Indicate
by check mark whether the  registrant  is an  accelerated  filer (as  defined in Rule
12b-2 of the  Exchange  Act).

|Yeso | Noþ
|---- | ---

Indicate
the number of shares outstanding of each  of the issuer's classes of common stock, as of
the latest  practicable date: 5,988,855 shares of common stock, par  value $.10,
outstanding as of August 5, 2005.

Page 1 of 27

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Healthaxis
Inc.

Table of
Contents

|               |                                                                   |  |  | Page |   
|-------------- | ----------------------------------------------------------------- |  |  | ---- | --
|               |                                                                   |  |  |      |   
|PART
    I     | Financial Information                                             |  |  |      |   
|               |                                                                   |  | 
|Item
      1.  | Consolidated
      Financial Statements                           |  |  |      | 3 
|               | Consolidated Balance Sheets                                       |  |  |      | 3 
|               | Consolidated
      Statements of Operations                       |  |  |      | 4 
|               | Consolidated Statements of Cash Flows                             |  |  |      | 5 
|               | Notes
      to Consolidated Financial Statements                  |  |  |      | 6 
|               |                                                                   |  | 
|Item
      2.  | Managements Discussion and Analysis of Financial Condition
and   |  | 
|               | Results of Operations                                             |  |  |      | 10
|               |                                                                   |  |  |      |   
|Item
      3.  | Quantitative
      and Qualitative Disclosures About Market Risk  |  |  |      | 17
|               |                                                                   |  |  |      |   
|Item
      4.  | Controls
    and Procedures                                       |  |  |      | 18
|               |                                                                   |  | 
|PART
      II. | Other
      Information                                           |  | 
|               |                                                                   |  |  |      |   
|Item
      1.  | Legal
    Proceedings                                             |  |  |      | 19
|               |                                                                   |  |  |      |   
|Item
      2.  | Unregistered
      Sales of Equity Securities and Use of Proceeds |  |  |      | 19
|               |                                                                   |  |  |      |   
|Item
     3.   | Defaults Upon Senior Securities                                   |  |  |      | 19
|               |                                                                   |  |  |      |   
|Item
      4.  | Submission
      of Matters to a Vote of Security Holders         |  |  |      | 19
|               |                                                                   |  |  |      |   
|Item 5.        | Other Information                                                 |  |  |      | 20
|               |                                                                   |  |  |      |   
|Item
      6.  | Exhibits                                                          |  |  |      | 20
|               |                                                                   |  |  |      |   
|Signatures     |                                                                   |  |  | 22   |   
|               |                                                                   |  |  |      |   
|Exhibit Index  |                                                                   |  |  | 23   |   

Page 2 of 27

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Table
  of Contents

|PART
      I        | Financial Information                                                                                                                                            |  |  |  |  | 
|------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  |  | 
|                    |                                                                                                                                                                  |  | 
|Item 1.             | Consolidated
      Financial Statements                                                                                                                          |  | 
|                    | Consolidated Balance Sheets                                                                                                                                      |  | 
|                    | Consolidated
      Statements of Operations                                                                                                                      |  | 
|                    | Consolidated Statements of Cash Flows                                                                                                                            |  | 
|                    | Notes
      to Consolidated Financial Statements                                                                                                                 |  |  |  |  | 
|                    |                                                                                                                                                                  |  | 
|Item
      2.       | Managements Discussion and Analysis of Financial Condition
and                                                                                                  |  | 
|                    | Results of Operations                                                                                                                                            |  |  |  |  | 
|                    |                                                                                                                                                                  |  |  |  |  | 
|Item
      3.       | Quantitative
      and Qualitative Disclosures About Market Risk                                                                                                 |  |  |  |  | 
|                    |                                                                                                                                                                  |  |  |  |  | 
|Item
      4.       | Controls
      and Procedures                                                                                                                                    |  |  |  |  | 
|                    |                                                                                                                                                                  |  | 
|PART
      II.      | Other
      Information                                                                                                                                          |  | 
|                    |                                                                                                                                                                  |  |  |  |  | 
|Item
      1.       | Legal
      Proceedings                                                                                                                                          |  |  |  |  | 
|                    |                                                                                                                                                                  |  |  |  |  | 
|Item
      2.       | Unregistered
      Sales of Equity Securities and Use of Proceeds                                                                                                |  |  |  |  | 
|                    |                                                                                                                                                                  |  |  |  |  | 
|Item
     3.        | Defaults Upon Senior Securities                                                                                                                                  |  |  |  |  | 
|                    |                                                                                                                                                                  |  |  |  |  | 
|Item
      4.       | Submission
      of Matters to a Vote of Security Holders                                                                                                        |  |  |  |  | 
|                    |                                                                                                                                                                  |  |  |  |  | 
|Item 5.             | Other Information                                                                                                                                                |  |  |  |  | 
|                    |                                                                                                                                                                  |  |  |  |  | 
|Item
      6.       | Exhibits                                                                                                                                                         |  |  |  |  | 
|                    |                                                                                                                                                                  |  |  |  |  | 
|Signatures          |                                                                                                                                                                  |  |  |  | 
|                    |                                                                                                                                                                  |  |  |  |  | 
|Exhibit
      Index |                                                                                                                                                                  |  |  |  | 
|                    |                                                                                                                                                                  |  |  |  | 
|31.1                | Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002, filed herewith.                                  |  |  |  |  | 
|31.2                | Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002, filed herewith.                                  |  |  |  |  | 
|32.1                | Certifications
      of Chief Executive Officer and Chief Financial Officer Pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002, furnished herewith. |  |  |  |  | 

---



PART I.
FINANCIAL INFORMATION

Item 1.
Consolidated Financial Statements

Healthaxis
Inc. and Subsidiaries Consolidated Balance Sheets

(In thousands
except share and per share  data) (Unaudited)

|                                                                                                |  |  | June
      30,
      2005 |          | December
      31,
      2004 |  
|----------------------------------------------------------------------------------------------- |  |  | ------------------------- | -------- | ----------------------------- | -
|                                                                                                |  |  |                           |          |                               |  
|Assets                                                                                          |  |  |                           |          |                               |  
|Current
      assets:                                                                           |  | 
|Cash
      and cash equivalents                                                                 |  |  | $                         | 6,453    |                               | $
|Accounts
      receivable, net of allowance for doubtful accounts of $48                        |  |  |                           | 2,374    |                               |  
|Prepaid
      expenses                                                                          |  |  |                           | 813      |                               |  
|                                                                                                |  |  |                           |          |                               |  
|Total
      current assets                                                                      |  |  |                           | 9,640    |                               |  
|Property,
      equipment and software, less accumulated depreciation and                       |  | 
|amortization
      of $8,843 and $9,421, respectively                                           |  |  |                           | 1,727    |                               |  
|Contract
      start-up costs, less accumulated amortization of $1,472 and $1,199, respectively |  |  |                           | 441      |                               |  
|Customer
      base, less accumulated amortization of $4,214 and $4,130, respectively           |  |  |                           | --       |                               |  
|Goodwill                                                                                        |  |  |                           | 11,276   |                               |  
|Other
      assets                                                                              |  |  |                           | 80       |                               |  
|                                                                                                |  |  |                           |          |                               |  
|Total
      assets                                                                              |  |  | $                         | 23,164   |                               | $
|                                                                                                |  |  |                           |          |                               |  
|                                                                                                |  | 
|Liabilities
      and Stockholders Equity                                                      |  | 
|Current
      liabilities:                                                                      |  | 
|Accounts
      payable                                                                          |  |  | $                         | 1,526    |                               | $
|Accrued
      liabilities                                                                       |  |  |                           | 677      |                               |  
|Accrued
      charge on lease abandonment                                                       |  |  |                           | 440      |                               |  
|Deferred
      revenues                                                                         |  |  |                           | 780      |                               |  
|Current
      portion of notes payable                                                          |  |  |                           | 657      |                               |  
|Current
      portion of post retirement and employment liabilities                             |  |  |                           | 124      |                               |  
|Current
      portion of capital lease obligations                                              |  |  |                           | 117      |                               |  
|                                                                                                |  |  |                           |          |                               |  
|Total
      current liabilities                                                                 |  |  |                           | 4,321    |                               |  
|                                                                                                |  |  |                           |          |                               |  
|Notes
      payable, net of current portion                                                     |  |  |                           | 1,694    |                               |  
|Post
      retirement and employment liabilities, net of current portion                        |  |  |                           | 794      |                               |  
|Capital
      lease obligations, net of current portion                                         |  |  |                           | 144      |                               |  
|Other
      liabilities                                                                         |  |  |                           | 406      |                               |  
|                                                                                                |  |  |                           |          |                               |  
|Total
      liabilities                                                                         |  |  |                           | 7,359    |                               |  
|                                                                                                |  | 
|Commitments
      and contingencies                                                             |  | 
|                                                                                                |  | 
|Stockholders
      Equity:                                                                     |  | 
|Preferred
      stock, par value $1.00: authorized 100,000,000 shares:                          |  |  |                           |          |                               |  
|Series
      A Convertible, 2,851,658 and 3,100,000 shares issued and outstanding,              |  |  |                           |          |                               |  
|respectively
      (no liquidation preference)                                                  |  |  |                           | 2,852    |                               |  
|Common
      stock, par value $.10: authorized 1,900,000,000 shares,                            |  | 
|issued
      and outstanding 5,988,855 and 3,518,291 shares, respectively                       |  |  |                           | 599      |                               |  
|                                                                                                |  |  |                           |          |                               |  
|Additional
      paid-in capital                                                                |  |  |                           | 448,510  |                               |  
|Notes
      receivable from employees                                                           |  |  |                           | (23      | )                             |  
|Accumulated
      deficit                                                                       |  |  |                           | (436,133 | )                             |  
|                                                                                                |  |  |                           |          |                               |  
|Total
      stockholders equity                                                                |  |  |                           | 15,805   |                               |  
|                                                                                                |  |  |                           |          |                               |  
|Total
      liabilities and stockholders equity                                                |  |  | $                         | 23,164   |                               | $
|                                                                                                |  |  |                           |          |                               |  

See notes to
unaudited consolidated financial statements.

Page 3 of 27

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Healthaxis
Inc. and Subsidiaries Consolidated Statements of Operations

(In
thousands, except share and per share data) (Unaudited)

|                                                             |  |  | Three
      Months Ended June 30, |           | Six
      Months Ended June 30, |  
|------------------------------------------------------------ |  |  | --------------------------------- | --------- | ------------------------------- | -
|                                                             |  |  | 2005                              |           | 2004                            |  
|                                                             |  |  |                                   |           |                                 |  
|Revenues                                                     |  |  | $                                 | 4,011     |                                 | $
|Expenses:                                                    |  | 
|Costs
      of revenue                                       |  |  |                                   | 3,696     |                                 |  
|Sales
      and marketing                                    |  |  |                                   | 254       |                                 |  
|General
      and administrative                             |  |  |                                   | 813       |                                 |  
|Reversal
      of contingent tax liability                   |  |  |                                   | (979      | )                               |  
|Lease
      abandonment charge                               |  |  |                                   | 500       |                                 |  
|Amortization
      of intangibles                            |  |  |                                   | --        |                                 |  
|                                                             |  |  |                                   |           |                                 |  
|Total
      expenses                                         |  |  |                                   | 4,284     |                                 |  
|                                                             |  |  |                                   |           |                                 |  
|                                                             |  |  |                                   |           |                                 |  
|Operating
      loss                                         |  |  |                                   | (273      | )                               |  
|Interest
      income and other income, net                  |  |  |                                   | 20        |                                 |  
|Interest
      expense                                       |  |  |                                   | (72       | )                               |  
|                                                             |  |  |                                   |           |                                 |  
|Net
      loss                                               |  |  |                                   | (325      | )                               |  
|Less:
      Preferred stock dividend reversal                |  |  |                                   | --        |                                 |  
|Add:
      Carrying amount of preferred stock                |  |  |                                   |           |                                 |  
|over
      fair value of consideration transferred           |  |  |                                   | --        |                                 |  
|                                                             |  |  |                                   |           |                                 |  
|Net loss
      attributable to common shareholders           |  |  | $                                 | (325      | )                               | $
|                                                             |  |  |                                   |           |                                 |  
|Net loss
      per share of common stock (basic and diluted) |  |  | $                                 | (0.07     | )                               | $
|                                                             |  |  |                                   |           |                                 |  
|Weighted
      average common shares used in                 |  | 
|computing
      loss per share                               |  | 
|Basic
      and diluted                                      |  |  |                                   | 4,938,794 |                                 |  

See notes to
unaudited consolidated financial statements.

Page 4 of 27

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Healthaxis
Inc. and Subsidiaries

Consolidated
Statements of Cash Flows

(In
thousands) (Unaudited)

|                                                               |  |  | Six
      Months Ended    |       
|-------------------------------------------------------------- |  |  | ------------------------- | ------
|                                                               |  |  |                           |       
|                                                               |  |  | June
      30,
      2005 |       
|                                                               |  |  |                           |       
|Cash
      flows from operating activities                     |  |  |                           |       
|Net
      loss                                                 |  |  | $                         | (1,283
|Adjustments
      to reconcile net loss to net cash used in    |  | 
|operating
      activities:                                    |  | 
|Depreciation
      and amortization                            |  |  |                           | 834   
|Bad
      debt reserve                                         |  |  |                           | --    
|Loss
      on disposal of fixed assets                         |  |  |                           | 2     
|Reversal
      of tax accrual                                  |  |  |                           | (979  
|Stock
      option compensation                                |  |  |                           | --    
|Change
      in:                                               |  | 
|Accounts
      receivable                                      |  |  |                           | (333  
|Prepaid
      expenses and other current assets                |  |  |                           | (178  
|Other
      assets                                             |  |  |                           | (24   
|Accounts
      payable and accrued liabilities                 |  |  |                           | 291   
|Accrued
      charge on lease abandonment                      |  |  |                           | 440   
|Deferred
      revenues                                        |  |  |                           | (143  
|Other
      liabilities                                        |  |  |                           | (35   
|                                                               |  |  |                           |       
|Net
      cash used in operating activities                    |  |  |                           | (1,408
|                                                               |  |  |                           |       
|Cash
      flows from investing activities                     |  | 
|Collection
      on notes receivable                           |  |  |                           | --    
|Capitalized
      software and contract start-up costs         |  |  |                           | (59   
|Purchases
      of property, equipment and software            |  |  |                           | (307  
|Proceeds
      from sale of property, equipment and software   |  |  |                           | 9     
|                                                               |  |  |                           |       
|Net
      cash used in investing activities                    |  |  |                           | (357  
|                                                               |  |  |                           |       
|Cash
      flows from financing activities                     |  | 
|Net
      proceeds from issuance of common stock               |  |  |                           | 4,288 
|Payment
      of preferred stock dividends                     |  |  |                           | --    
|Other                                                          |  |  |                           | --    
|                                                               |  |  |                           |       
|Net
      cash generated (used) in financing activities        |  |  |                           | 4,288 
|                                                               |  |  |                           |       
|Increase
      (decrease) in cash and cash equivalents         |  |  |                           | 2,523 
|Cash
      and cash equivalents, beginning of period           |  |  |                           | 3,930 
|                                                               |  |  |                           |       
|Cash
      and cash equivalents, end of period                 |  |  | $                         | 6,453 
|                                                               |  |  |                           |       
|Non-cash
      financing activities:                           |  | 
|Exchange
      of accounts receivable for note payable to UICI |  |  | $                         | 327   

See notes to
unaudited consolidated financial statements.

Page 5 of 27

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Healthaxis
Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements June 30, 2005

Note A  Description
of business and basis of presentation

Unaudited
Financial Information

The
unaudited  consolidated  financial  statements  have been  prepared by  Healthaxis  Inc.
and its  subsidiaries  (Healthaxis or the  "Company"),  pursuant
to the rules and  regulations  of the  Securities  and Exchange  Commission  and  reflect
all  adjustments  consisting  of  normal  recurring  entries,  which, in the opinion of
the Company,  are necessary  to present  fairly the results for the  interim  periods.
The  interim  financial  statements do not include all  disclosures  provided in fiscal
year end financial  statements  prepared in  accordance with accounting  principles
generally  accepted in  the United  States of America,  although the Company  believes
that the  accompanying  disclosures  are  adequate to make the  information  presented
not  misleading.  Results of operations  for the three and six-month  periods ended June
30, 2005,  are  not  necessarily  indicative  of  the  results  that  may  be  expected
for the year ending December 31, 2005.

These
financial  statements  should  be  read  in  conjunction  with the financial  statements
and notes thereto  contained  in the  Company's  Annual  Report  on Form 10-K for  the
year ended December 31, 2004.

General

Healthaxis
is  a  technology-enhanced  provider  of  fully  integrated  solutions  and services for
health  benefit  administrators  and health insurance claim  processors.  These
solutions,  which  are  comprised  of  software  products  and  related  business
process  services,  are  designed to assist  health insurance payers,  third party
administrators  (TPA)  and  preferred  provider  organizations  (PPO")
provide  enhanced  claims  related  services  to  members,  employees,  employers  and
providers  at lower cost.  These  services are  provided  through  the  application  of
Healthaxis flexible  technology  on  an  Application  Service  Provider  (ASP)
basis.  These  technology  solutions  are  complemented  by  Healthaxis web-based
capabilities  and  Business  Process  Outsourcing  (BPO)  services,  which
are  offered  to  the  Companys  ASP  clients  and  on  a  stand-alone  basis.  BPO
solutions  include the  automated  capture,  imaging,  storage  and retrieval of
electronic claims,  attachments,  and related  correspondence,  in  addition  to
rules-based  claims  pre-adjudication  and editing and  automated  PPO routing (via
electronic  data  interchange  or  EDI)  and  repricing.  Healthaxis  uses
its  deep  domain  expertise  in  health  insurance  operations  to  surround  the
payment  of a health  insurance  claim,  to customize  services to meet the specific
needs  of  its  customers  and  to  produce  value  for  those  customers by tapping
unrealized  potential in the  customers operations to achieve best results.

Reclassification
of prior year amounts

Certain
prior year amounts have been  reclassified  to conform  with the  current  year
presentation  or in  accordance  with  applicable accounting requirements.

Earnings Per
Share

Basic
loss per  share is  computed  only on  the  weighted  average  number  of common  shares
outstanding  during the  respective  periods.  Diluted  earnings  per share  is  computed
to  show  the  dilutive  effect,  if  any,  of  convertible  preferred  stock,  stock
options  and  warrants  using the treasury  stock  method based on the average  market
price  of  the  stock  during  the  respective  periods.  The  effect of including the
convertible  preferred  stock,  stock  options  and  warrants,  totaling  11,436,211  and
6,092,598  shares  at  June  30,  2005  and  2004 respectively,
in  the  computation  of  diluted  earnings  per  share  would  be  anti-dilutive.
Accordingly,  these  items  have  not  been  included  in  the  computation.  Following
is  a  summary  of  these securities:

Page 6 of 27

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|                                       |  | 2005       |  | 2004      | 
|-------------------------------------- |  | ---------- |  | --------- | 
|                                       |  |            |  |           | 
|Options                                |  | 1,333,816  |  | 1,127,026 | 
|Warrants                               |  | 7,250,737  |  | 1,115,572 | 
|Preferred
      stock                  |  | 2,851,658  |  | 3,850,000 | 
|                                       |  |            |  |           | 
|Total
      common shares if converted |  | 11,436,211 |  | 6,092,598 | 
|                                       |  |            |  |           | 

Stock-Based
Compensation

The
Company  has  elected to  continue  to utilize the  accounting  method  prescribed  by
APB  Opinion No.  25  Accounting  for Stock  Issued  to  Employees  (APB
25),  and  provide  the  disclosure  requirements  of  SFAS  No.  123,  Accounting
for  Stock-Based  Compensation (SFAS  123),  as  amended  by  SFAS  No.  148,
Accounting  for  Stock-Based  Compensation  --  Transition  and  Disclosure
(SFAS  148).  Although  the Company  selected  an  accounting  policy  which
requires  only the  excess of the  market  value of its common  stock  over  the
exercise  price  of  options  granted  to be  recorded  as  compensation  expense
(intrinsic  method),  pro  forma  information  regarding  net loss is  required as if the
Company had  accounted  for its employee  stock  options under  the  fair  value  method
of SFAS  123.  Pro  forma  net  loss  applicable  to  the  options  granted  is  not
likely  to  be  representative  of  the  effects  on  reported  net  loss  for  future
periods.  The  fair  value  for  these  options  is  estimated  at the date of grant
using a  Black-Scholes  option  pricing  model.  Stock  compensation  determined  under
the  intrinsic  method is recognized  over the vesting period using  the straight-line
method.

Had
compensation cost for the Companys stock  option grants been determined based on
the fair value at the  date granted in accordance with the provisions of SFAS 123,  the
Companys net loss and net loss per common share would  have been increased to the
following pro forma amounts:

|                                                        |  |  | (In
      thousands, except per share data) |             
|------------------------------------------------------- |  |  | ------------------------------------------- | ------------
|                                                        |  |  | Three
      Months Ended June 30,           |             
|                                                        |  |  | 2005                                        |             
|                                                        |  |  |                                             |             
|Net loss,
      attributable to common shareholders     |  |  | $                                           | (325        
|Stock
      based compensation expense recorded         |  |  |                                             |             
|under
      the intrinsic value method                  |  |  |                                             | --          
|Pro forma
      stock based compensation expense        |  | 
|computed
      under the fair value method              |  |  |                                             | (168        
|                                                        |  |  |                                             |             
|Pro forma
      net loss                                |  |  | $                                           | (493        
|                                                        |  |  |                                             |             
|Loss
      per share of common stock, basic and diluted |  | 
|As
      reported                                       |  |  | $                                           | (0.07       
|                                                        |  |  |                                             |             
|Pro
      forma                                         |  |  | $                                           | (0.
      10
|                                                        |  |  |                                             |             

The
Company  granted  329,000  options  in the  second  quarter  2005,  275,000  of which
were  granted  to  employees  simultaneous  with the  closing of the  financing
transaction  described  in Note E  below.  The fair  value  of the  options  and
warrants  granted  are  estimated  on the  date of  grant  using  the  Black-Scholes
option-pricing  model.  The  major  assumptions  used  include  no  dividends  paid,  a
weighted  average  expected  life  of  2.8  years,  expected  stock  volatility  of 69%
and risk  free  interest  rates  of  3.71%.  The  weighted-average  grant-date  fair
value  of  options  granted during 2005 was $.80.

Page 7 of 27

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Note B  Post
Retirement Benefits

Healthaxis
has  an  obligation  to  provide  certain  post retirement  benefits,  primarily lifetime
health,  dental  and  life  insurance  coverage,  to  a  group  of  individuals
consisting  of  three  former  executives  and  17  retired  employees  of  Provident
American  Corporation,  which became  Healthaxis,  and  the  Companys  former
Chairman.  The  following  table  sets  forth  the  components  of  net  postretirement
benefit expense for all plans:

|                                         |  |  | (Table
      in thousands)       |   
|---------------------------------------- |  |  | -------------------------------- | --
|                                         |  |  | Three
      Months Ended June 30 |   
|                                         |  |  |                                  |   
|                                         |  |  | 2005                             |   
|                                         |  |  |                                  |   
|Interest
      cost                      |  |  | $                                | 14
|Transition
      obligation amortization |  |  |                                  | 14
|                                         |  |  |                                  |   
|Net post
      retirement expense        |  |  | $                                | 28
|                                         |  |  |                                  |   

Note C  Significant
Customer Concentrations

For
the three  months  ended June 30,  2005 and 2004,  each  of  four  customers  represented
greater  than  10%  of  revenues,  totaling  $2.7  million  (67%)  and  $2.5  million
(63%),  respectively,  of the Companys  total  revenues.  For  the six  months
ended  June 30,  2005 and  2004,  these  four  customers  accounted  for $5.3 million
(66%) and $5.1 million  (63%),  respectively,  of the  Companys  total  revenues.
At  June 30, 2005 and December 31,  2004,  one customer  accounted  for  $817,000  (34%)
and  $822,000  (35%)  of  the  Companys  accounts  receivable,  respectively.  This
customer is making  payments in accordance with the terms of its contract.

Note D  Other
Liabilities and Contingencies

Other
liabilities  include $324,000 and $1.3 million  of contingent  tax  liabilities  at June
30, 2005 and December  31,  2004.  In the period  ending June 30,  2005,  the Company
reversed  a  contingent  tax  liability  of  approximately  $979,000 as the related
limitation period has expired.

Note E  Financing
Transaction

In
May  2005,  the  Company  closed  a  financing  transaction with Tak  Investments,  Inc.
(the  Investor),  a  Delaware  corporation  owned  by Mr.  Sharad  Tak.
Under  the  terms and conditions of the agreement  with the Investor,  the  Company
issued  to the  Investor  2,222,222  shares of common  stock  at  a  per  share  purchase
price  of  $2.25  for  an  aggregate  initial  investment of $5.0  million.  The Investor
also  received  three  warrants  at  the  closing.  The  first  warrant,  which  provides
for an exercise  price of $2.25 per  share of common  stock and a term of two  years,
permits  the  Company  to call the  exercise  of up to  3,333,333  shares of  common
stock under  certain  conditions,  but only permits the  Investor to exercise  the
warrant for up to  2,222,222  shares  of common  stock.  The second  warrant,  which has
an exercise  price of $2.70 and a  three-year  term,  permits the  Investor  to  purchase
up to  1,388,889  additional  shares  of  common  stock.  Of  that  total,  555,556
shares  are  immediately  available to be  exercised by the Investor and 833,333  shares
are dependent  upon the amount  ultimately  invested under the  first  warrant.  The
third  warrant,  which  has an  exercise  price of $3.15 and a four-year  term,  permits
the Investor to  purchase up to 1,388,889  additional  shares of common  stock.  Of that
total,  555,556  shares are  immediately  available to  be  exercised  by  the  Investor
and  833,333  shares  are  dependent  upon  the  amount  ultimately  invested  under  the
first warrant.

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As
a part of the  closing,  the Company  also entered  into a five year Remote  Resourcing
Agreement with Healthcare  BPO  Partners  L.P.,  a company  affiliated  with the Investor
and  owned  by Mr.  Tak.  Healthcare  BPO  Partners,  based in  Jaipur India,  provides
personnel and  infrastructure  that is  utilized  by  the  Company  to  provide  business
process  outsourcing  services  and  other  software  development  and  technical
support  services  to  support  the  Companys  operations.  The services
outsourced to this offshore  vendor  supplement the Companys existing  wholly-owned
operations in  Utah,  Texas and  Jamaica.  For the three and six months ended  June 30,
2005, the Company  incurred  $80,000 of costs related  to this  agreement,  which is
included in accounts  payable at  June 30, 2005.

Note F Real
Estate Lease

In
April 2005,  the Company  entered into a lease for  approximately  20,000  square feet of
office space  located at  7301 North State  Highway 161,  Irving,  Texas.  The new lease
was entered into for the purpose of  relocating  the corporate  headquarters  from  the
present  location  at  5215  North  OConnor  Blvd,  Irving,  Texas,  where the
Company  occupies  approximately  31,300 square feet.  Lease  payments on the new  lease
will start on January  1,  2006,  which  coincides  with  the  termination  of  the
North  OConnor  Blvd.  lease  on  December 31, 2005.

In
June 2005,  the  Company  substantially  completed  the  move  of its  headquarters  and
incurred  certain  costs  related to the  relocation  of  personnel  and  equipment  and
recorded  a lease  abandonment  charge of  $500,000  as of the  cease-use  date  in  the
second  quarter  2005.  This  charge  consists  of  relocation  costs  incurred  to  date
and  the  write-off  of certain  assets  abandoned  in the move,  plus a  $440,000
accrual  for  the  future  rent  and  rent  related  obligations  of the  former
headquarters.  The  accrued  rent  and rent related  obligations  will be paid on a
monthly basis  through  December  31,  2005  in  accordance  with  the  lease  terms.
Future expenses  related to the  abandonment,  such as  the  Companys  pro-rata
share of utility  costs and possible  equipment  de-installation  charges  will  be
expensed  as  incurred in the lease abandonment charge.

Lease
payment  obligations  under the new lease start  in January  2006 and end in June  2010.
Rental  expense  will  be  based  upon  the  total  rental  payments  taken  on  a
straight-line  basis  over  the  63-month  term of the  lease,  including  the rent
abatement  period  from April to December  2005.  The  new  lease  also  provides  terms
under  which  ownership  of  certain  furniture  and  equipment  will  be  conveyed  to
the  Company in April  2007,  providing  that the  Company  has met  its  obligations
under  the  lease  at that  time.  A capital  lease  obligation  of $254,000  was
recorded  in the second  quarter of 2005 to  recognize  that  portion of  the total
payments,  which are  allocated to the  acquisition  of the  furniture  and  equipment.
Allocation  of  the  total  lease  payment  between the office space and the furniture
and  equipment  acquisition was based upon a third-party  appraisal  of  the  fair
market  value  of  the  furniture  and  equipment.

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Item 2.
Managements Discussion and Analysis of Financial Condition and Results of
Operations

Forward-Looking
Statements

All
statements  other than  statements of historical  fact  contained in this report,
including  statements in this  Management's  Discussion and Analysis of Financial
Condition  and  Results  of  Operations  concerning  the  Company's  financial
position  and  liquidity,  results  of  operations,  prospects  for  future  growth,  and
other  matters  are  forward-looking  statements.  These  statements  may  be  identified
with  words  such  as  anticipate,  believe,  plan,
estimate,  expect,  intend,  should,
could,  goal,  target,  designed,
on  track,  comfortable  with,  optimistic  and
other  similar  expressions,  and  constitute  forward-looking  statements  within the
meaning of  Section 27A of the  Securities  Act of 1933,  as amended,  and  Section  21E
of  the  Securities  Exchange  Act  of  1934,  as  amended.  These  forward-looking
statements  are  subject  to  known and  unknown  risks,  uncertainties  and other
factors,  which may cause  actual  results  to be  materially  different  from those
contemplated  by the  forward-looking  statements.  Such factors  include the risks and
uncertainties  identified  in  Healthaxis  documents  filed with,  or  furnished  to, the
Securities  and  Exchange  Commission,  including  without  limitation those  identified
under the caption  BusinessRisk  Factors  in the  Companys  Form
10-K  for  the  year  ended  December  31,  2004,  and  under  the  caption  Proposal
I  Approval of Issuance  of Common  Stock and Related  Securities
Transactions-Factors  Affecting  Current Common  Shareholders in the Companys
Proxy  Statement  dated March 30, 2005.  The  Company  undertakes  no  obligation  to
publicly  update  or  revise  any  forward-looking  statements,  whether as a result  of
new  information,  future events or otherwise.  Readers are  cautioned  not to  place
undue  reliance  on  forward-looking  statements.

Overview

Healthaxis
is  a  technology-enhanced  provider  of  fully  integrated  solutions  and services for
health  benefit  administrators  and health insurance claim  processors.  These
solutions,  which  are  comprised  of  software  products  and  related  business
process  services,  are  designed to assist  health insurance payers,  third party
administrators  (TPA)  and  preferred  provider  organizations  (PPO)
provide  enhanced  claims  related  services  to  members,  employees,  employers  and
providers  at lower cost.  These  services are  provided  through  the  application  of
Healthaxis flexible  technology  on  an  Application  Service  Provider  (ASP)
basis.  These  technology  solutions  are  complemented  by  Healthaxis web-based
capabilities  and  Business  Process  Outsourcing  (BPO)  services,  which
are  offered  to  the  Companys  ASP  clients  and  on  a  stand-alone  basis.  BPO
solutions  include the  automated  capture,  imaging,  storage  and retrieval of
electronic claims,  attachments,  and related  correspondence,  in  addition  to
rules-based  claims  pre-adjudication  and editing and  automated  PPO routing (via
electronic  data  interchange  or  EDI)  and  repricing.  Healthaxis  uses
its  deep  domain  expertise  in  health  insurance  operations  to  surround  the
payment  of a health  insurance  claim,  to customize  services to meet the specific
needs  of  its  customers  and  to  produce  value  for  those  customers by tapping
unrealized  potential in the  customers operations to achieve best results.

Healthaxis
Inc.  is  a  Pennsylvania  corporation,  which was organized in 1982.  Healthaxis common
stock trades  on the NASDAQ  SmallCap  Market  under the symbol  HAXS. The
operations  of  Healthaxis  are  conducted  through  its  subsidiary,  Healthaxis,  Ltd.
Unless otherwise indicated,  or  the  context  otherwise  requires,  all  references  in
this  document to the Company,  Healthaxis,  we,
our or us  include  Healthaxis  Inc.  and  all  of  its
subsidiaries.  Healthaxis  maintains  a website  at  www.healthaxis.com.  The  Healthaxis
Code of  Conduct  can be found  on the  Healthaxis  website.  Information  found on the
Healthaxis  website is not  a part of this report.

Revenue Model

The
Companys  revenues  consist  primarily  of  application  service  provider  (ASP)
fees,  transaction  fees  and  professional  service fees, as further  described  below.
The  ASP  services  are  substantially  dependent  on  the  Companys proprietary
software,  and agreements with customers  contain  a  license  for  the  use of the
relevant

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software.
These  licenses  provide  for  use  of  the  software  in  the  Companys hosted
environment and do not give the customer the  contractual  right to take  possession  of
the  software.  The  customers  access  to  the  Companys  hosted  software
is  through  dedicated  data  lines  or the  Internet.  With  some  exceptions,  the
Company  has not  historically  licensed  its  benefits  administration  and claims
processing  software for  installation  on  customers'  systems and no new such licenses
have been granted in 2005 or 2004.

A
significant  portion of the  Company's  revenues is  based  on  providing  ASP  services
to our  health  insurance  company,  third-party  administrator  and  self-insured  plan
customers.  The ASP  service  includes  a  license  to use our  benefits  administration
and  claims  processing  software,  including  hosting,  maintenance  and  support,
which  is  typically  charged  on  a  per-employee-per-month  (PEPM),  or
per-member-per-month  (PMPM) basis.  In addition,  the Company  surrounds  these  hosted
software-use  rights  with  such BPO  services  as imaging,  data  capture  and
retrieval,  EDI and  print  and  mail  services,  as  well  as  PPO  routing  and
repricing  services,  and  claims  editing  services.  These  services are  typically
charged on a  transaction  fee basis,  such as per  claim,  per  image and per  document.
Due to the  long-term  nature  of the  ASP  arrangement  and  because  all  revenue
elements  included  in the  collective  services  are  typically  not  sold  separately,
the  ASP  and  BPO  service  revenues  are  recognized  ratably  over  the  term  of  the
agreement and/or as transaction services are provided.

In
preparation  for providing  services  under these  multi-year ASP  contracts,  the
Company also usually agrees to  perform  certain  start-up  activities  directly  related
to  customizing  and  configuring  the  licensed  software  and  loading  insurance  plan
data  for  performance  under  the  contract.  The Company  defers costs and revenues
relating to  these  start-up  activities  and  recognizes  such  costs  and  revenues
ratably over the term of the ASP contract.

Periodically,
while  an ASP  contract  is in  place,  the Company also performs  professional  services
upon request  and  recognizes  the related  revenue on a time and  materials  basis as
services are performed.  Such  professional  services  are not sold in conjunction  with
a software  license included  in the original ASP contract or other  revenue  elements
and,  therefore, are accounted for separately from the ASP contact.

The
Company uses  contract  accounting  for contracts  where  significant  software
modification  is  performed  or  where  services  are  performed  that  are  essential
to  the  functionality  of  the  delivered  software.  Generally,  contracts that include
significant  software  modification are  accounted for using the  percentage of
completion  method with  progress  measured  based  on  the  cost-to-cost  method.
Contracts  with  significant  customer  acceptance  provisions  are  recognized  using
the  completed  contract  method  upon  achieving customer  acceptance of the completed
project.  The  Company  currently  has no  contracts  in  progress  for which  contract
accounting is being applied.

Financing
Transaction:

Following
approval  by  the  Companys  common  shareholders,  on May 13, 2005 the Company
closed a financing  transaction with Tak  Investments,  Inc. (the  Investor),
a  Delaware  corporation  owned  by Mr.  Sharad  Tak.  Under  the  terms  and  conditions
of  the  Stock  and  Warrant  Purchase  Agreement  with the Investor (the Purchase
Agreement),  the  Company  issued  to the  Investor  2,222,222  shares of common
stock  at  a  per  share  purchase  price  of  $2.25  for  an  aggregate  initial
investment of $5.0  million.  The Investor  also  received  three  warrants  (the  Warrants)
at  the  Closing.  The first  Warrant,  which  provides for an exercise  price of $2.25
per  share of  common  stock and a term of two  years,  permits  the  Company  to call
the  exercise  of up to  3,333,333  shares of common  stock (for an  aggregate of up to
$7.5 million) under certain  conditions,  but only permits the  Investor to exercise  the
Warrant for up to  2,222,222  shares  of  common  stock  (for an  aggregate  of $5.0
million).  The  Companys  ability to call the  exercise of the first  Warrant  is
subject  to  the  satisfaction  of  certain  conditions,  including  unanimous  approval
of such action by the Companys  Board  of  Directors  (which  requires  the
approval  of  the  Investors  designees  to the  Board,  as  referenced  below).
The  Investor  also  received  two  additional  warrants  representing  the  right  to
purchase  additional  shares  of  common  stock at prices of $2.70  and  $3.15  per
share.  The

Page 11 of 27

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number  of
shares  of  common  stock  subject  to  these  two  additional  Warrants is dependent
upon the amount  ultimately  exercised  under the first  Warrant,  but could total up to
an  additional  2,777,778  shares  of  common  stock  and  could  provide additional cash
to the Company of up to $8.1 million.

In
connection  with the closing,  the Company and the  Investor  entered into a number of
related  agreements.  Under  the terms of an  Investor  Rights  Agreement,  the
securities  purchased  by the  Investor  are  subject to limited  transfer  restrictions,
and the  Investor  has  the  right  to  approve  certain  fundamental  corporate
activities,  the  right  to  participate  in  other  Healthaxis  equity  financings  and,
depending  upon the size of the  Companys  Board of Directors  and  the  Investors
continuing  ownership  position  in  the  Company,  the right to  designate  one to three
nominees  for  election to the Companys  Board of  Directors.  In accordance  with
the  terms  of  the  Investor  Rights  Agreement,  the  Investor  recently  designated
and  the  Board  of  Directors  elected  two  additional  members  to the Board of
Directors.  The  parties  also  entered  into  a  Registration  Rights  Agreement  under
which  the  Company  agrees  to  file  a  registration  statement  covering  the resale
of the shares of  common  stock  purchased  under  the  Purchase  Agreement  or  through
exercise of the Warrants.

As
a part of the  closing,  the Company  also entered  into  a  five  year  Remote
Resourcing  Agreement  (the  Resourcing  Agreement)  with Healthcare BPO
Partners L.P., a  company  affiliated  with the  Investor  and owned by Mr. Tak.
Healthcare  BPO  Partners,  based in  Jaipur  India,  provides  personnel and
infrastructure  that is utilized by the Company  to provide  business  process
outsourcing  services and other  software  development  and  technical  support  services
to  support  the  Companys  operations.  Services  outsourced  to  this  offshore
vendor  supplement  the  Companys  existing  wholly-owned operations in Utah, Texas
and Jamaica.

Preferred Stock:

On
June  30,  2004,  Healthaxis  consummated  a  transaction  modifying  the terms of its
Series A  Convertible  preferred  stock  and  providing  for  the  issuance  to  its
preferred  shareholders  of warrants to purchase shares of the  Companys  common
stock.  Under the  terms of the  agreements  with  the  preferred  shareholders,  shares
of the  preferred  stock are  convertible  into  shares of the  Company's  common  stock
on a  one-for-one  basis.  The  preferred  shareholders  also  received  warrants  with a
term of five years  entitling  them to  purchase  shares of common  stock,  on a
one-for-one  basis,  at an exercise  price of $5.50 per share (subject to a  cashless
exercise  feature  that  applies  under  some  circumstances).  As of August  5,  2005,
there are  2,851,658  preferred  shares  and  1,000,000  warrants  outstanding.  The
shares of common  stock  into  which the  shares of  preferred  stock are  convertible
and with respect to which the warrants  are  exercisable  represent  approximately  22%
of our  common  stock on a fully  diluted  basis as of that  date.  Holders of  the
preferred  stock  have  no  liquidation  preference,  no  voting  rights  except  as
required  by  law,  the  right  to  receive  a  nominal  dividend  of  $0.0001  per
share  semi-annually  (aggregating  less  than  $1,000  per  year  in  total) and
otherwise  on a pro-rata  basis to the extent that  dividends  are  paid  to  holders  of
common  stock,  limited  anti-dilution  rights in the  context of stock  splits,  stock
dividends  and  similar  transactions,  and  no  redemption  rights.

The
shares of preferred  stock are  convertible  into  shares  of  common  stock  at  the
option  of  a  preferred  shareholder at any time,  and in any amount,  on or after June
30,  2005.  However,  the  agreements  restrict  the number of  shares  of  common  stock
that  may be  sold  in  the  public  markets  below a price of $3.50  per  share.  In the
event of  the transfer of shares of preferred  stock in accordance  with  the terms of
the agreements  with the preferred  shareholders,  the  preferred  stock  automatically
converts  into shares of  common  stock.  Healthaxis  may  compel  conversion  of  the
preferred  stock or  exercise of the  warrants  granted to the  preferred shareholders
under some circumstances.

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Critical
Accounting Policies

Critical
accounting  policies  are  those  which are  most  important to the financial  statement
presentation  and  that  require  the  most  difficult,  subjective  complex  judgments.
There  have  been  no  changes  in  the  Companys  critical  accounting  policies
as described  in the  Companys  Form 10-K for the year ended December 31, 2004.

Results of
Operations

Three months
ended June 30, 2005 compared to three months ended June 30, 2004

|                       |  |  | (Table
      in thousands)        |       |      |  
|---------------------- |  |  | --------------------------------- | ----- | ---- | -
|                       |  |  | Three
      Months Ended June 30, |       |      |  
|                       |  |  | 2005                              |       | 2004 |  
|                       |  |  |                                   |       |      |  
|Revenues               |  |  | $                                 | 4,011 |      | $
|Cost
      of revenues |  |  |                                   | 3,696 |      |  
|                       |  |  |                                   |       |      |  
|Gross
      profit     |  |  | $                                 | 315   |      | $
|                       |  |  |                                   |       |      |  
|%
      of revenue     |  |  |                                   | 8     | %    |  

Revenues
were up approximately $117,000 (3%) in the three months ended June 30, 2005 compared
to the same period in 2004. Increases in professional services revenue of
$90,000, transaction revenue of $52,000 and recurring PEPM license fee revenue of
$148,000 were primarily the result of the expansion and increased number of covered
lives with one of our larger clients. This increase was partially offset by a
decline of $145,000 in data capture revenue primarily the result of a customer in a
run-off stage.

Cost
of revenues includes all expenses directly associated with the production of
revenue, and consists primarily of salaries and related benefits, rent,
amortization and depreciation, system expenses such as maintenance and repair,
as well as other related consumables. Cost of revenues declined $328,000 (8%) in
the three months ended June 30, 2005 compared to the same period in 2004. Cost of
revenues was 92% of revenues in the 2005 period compared to 103% in the 2004
period. Approximately $257,000 of the decrease in costs was due to lower personnel
and contractor costs resulting from staff reductions. An additional $62,000 of
the decline in costs was due to reduced costs of travel and entertainment,
supplies and other costs related to the staff reductions.

|                                           |  |  | (Table

      in thousands)        |      |      |  
|------------------------------------------ |  |  | ---------------------------------- | ---- | ---- | -
|                                           |  |  | Three

      Months Ended June 30, |      |      |  
|                                           |  |  | 2005                               |      | 2004 |  
|                                           |  |  |                                    |      |      |  
|Sales
      and marketing expense          |  |  | $                                  | 254  |      | $
|General
      and administrative expense   |  |  |                                    | 813  |      |  
|Reversal
      of contingent tax liability |  |  |                                    | (979 | )    |  
|Lease
      abandonment charge             |  |  |                                    | 500  |      |  
|Amortization
      of intangibles          |  |  |                                    | --   |      |  
|Interest
      and other income, net       |  |  |                                    | 20   |      |  
|Interest
      expense                     |  |  |                                    | (72  | )    |  

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Sales
and marketing expenses consist primarily of employee salaries and related
benefits, as well as promotional costs such as direct mailing campaigns, trade
shows and media advertising. Sales and marketing expenses decreased $87,000 (26%)
in the three months ended June 30, 2005 compared to the same quarter of 2004 due to
changes in the sales staff. Lower personnel costs, consulting fees and the related
decrease in travel resulted in a decline of $111,000. This decline in expenses
was partially offset by an increase of $32,000 in increased marketing expenses,
including collateral material and trade show attendance.

General
and administrative expenses include executive management, accounting, legal and
human resources compensation and related benefits, as well as expenditures for
applicable overhead costs. These expenses decreased $293,000 (26%) in the three
months ended June 30, 2005 compared to the same quarter of 2004. The decline as
due to a reduction in outside professional fees for legal, accounting and
consulting related to expenses incurred in 2004 for the preferred stock conversion.

Reversal
of contingent tax liability of $979,000 was recorded as a credit to the Statement
of Operations in the three months ended June 30, 2005. This was a result of the
expiration of the applicable statute of limitation period in the second quarter
2005. There was no such credit for in 2004.

Lease
abandonment charge consists of expenses related to the Companys former
headquarters, which was abandoned in favor of a new office lease in June 2005. The
$500,000 charge in the three months ended June 30, 2005 includes relocation
costs incurred to date and the write-off of certain assets abandoned in the move, plus
an accrual for the future rent and certain rent related obligations of the former
headquarters. There was no such charge in 2004.

Amortization
of intangibles includes the amortization of developed software and customer
base acquired in the January 2001 Healthaxis merger. These expenses were
reduced $252,000 in the three months ended June 30, 2005 compared to the same
quarter of 2004, as these intangible assets were fully amortized in January 2005.

Interest
and other income, net increased $7,000 (54%) in the three months ended June 30,
2005 compared to the same quarter of 2004 due primarily to higher balances of cash
resulting from the financing transaction completed in May 2005.

Interest
expense increased $11,000 in the three months ended June 30, 2005 compared to
the same quarter of 2004. Interest expense is primarily related to the note
payable to UICI.

Six months
ended June 30, 2005 compared to six months ended June 30, 2004

|                       |  |  | (Table
      in thousands)      |       |      |  
|---------------------- |  |  | ------------------------------- | ----- | ---- | -
|                       |  |  | Six
      Months Ended June 30, |       |      |  
|                       |  |  | 2005                            |       | 2004 |  
|                       |  |  |                                 |       |      |  
|Revenues               |  |  | $                               | 8,137 |      | $
|Cost
      of revenues |  |  |                                 | 7,792 |      |  
|                       |  |  |                                 |       |      |  
|Gross
      profit     |  |  | $                               | 345   |      | $
|                       |  |  |                                 |       |      |  
|%
      of revenue     |  |  |                                 | 4     | %    |  

Page 14 of 27

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Revenues
were down $6,000 in the six months ended June 30, 2005 compared to the same period in
2004. The loss of a data capture client, now in a run-off stage, resulted in a $339,000
reduction in data capture revenue. This decline was offset by increases in professional
services revenue of $144,000 and recurring PEPM license fee revenue of $220,000, which
was primarily the result of the expansion and increased number of covered lives with one
of our larger clients, as well as increased project work with several other clients.
Small declines in other revenues account for the remaining net reduction for the
comparable periods.

Cost
of revenues declined $585,000 (7%) in the six months ended June 30, 2005 compared
to the same period in 2004. Cost of revenues was 96% of revenues in 2005 compared
to 103% in 2004. Approximately $438,000 of the decrease in costs was due to
lower personnel and contractor costs resulting from staff reductions. An
additional $124,000 of the decline in costs was due to reduced costs of travel and
entertainment, supplies and other costs related to the staff reductions.

|                                           |  |  | (Table
      in thousands)      |       |      |  
|------------------------------------------ |  |  | ------------------------------- | ----- | ---- | -
|                                           |  |  | Six
      Months Ended June 30, |       |      |  
|                                           |  |  | 2005                            |       | 2004 |  
|                                           |  |  |                                 |       |      |  
|Sales
      and marketing expense          |  |  | $                               | 467   |      | $
|General
      and administrative expense   |  |  |                                 | 1,457 |      |  
|Reversal
      of contingent tax liability |  |  |                                 | (979  | )    |  
|Lease
      abandonment charge             |  |  |                                 | 500   |      |  
|Amortization
      of intangibles          |  |  |                                 | 84    |      |  
|Interest
      and other income, net       |  |  |                                 | 28    |      |  
|Interest
      expense                     |  |  |                                 | (127  | )    |  

Sales
and marketing expenses decreased $167,000 (26%) in the six months ended June 30,
2005 compared to the same period of 2004. Lower personnel costs, consulting fees
and the related decrease in travel and supplies resulted in a decline of $193,000.
This decline in expenses was partially offset by an increase of $29,000 in
increased marketing expenses, including collateral material and trade show
attendance.

General
and administrative expenses decreased $617,000 (30%) in the six months ended
June 30, 2005 compared to the same period of 2004. The decline was due
primarily to a reduction in outside professional fees for legal, accounting and
consulting services. Approximately $373,000 of that decline was specifically
related to expenses incurred in 2004 for the preferred stock conversion.

Reversal
of contingent tax liability of $979,000 was recorded as a credit to the Statement
of Operations in the six months ended June 30, 2005. This was a result of the
expiration of the applicable statute of limitation period in the second quarter
2005. There was no such credit for in 2004.

Lease
abandonment charge consists of expenses related to the Companys former
headquarters, which was abandoned in June 2005 in favor of a new office lease
completed in April 2005. The $500,000 charge in the six months ended June 30,
2005 includes relocation costs incurred to date and the write-off of certain
assets abandoned in the move, plus an accrual for the future rent and certain
rent related obligations of the former headquarters. There was no such charge in
2004.

Amortization
of intangibles was reduced $444,000 (84%) in the six months ended June 30, 2005
compared to the same period of 2004, as the developed software and customer base
were fully amortized in January 2005.

Page 15 of 27

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Interest
and other income, net decreased $12,000 in the six months ended June 30, 2005
compared to the same period of 2004 due to lower cash balances during most of the
2005 period, prior to the financing transaction in May, and lower balances on notes
receivable resulting from the normal course of collections.

Interest
expense was relatively unchanged during the six months ended June 30, 2005
compared to the same period of 2004. Interest expense is primarily related to
the note payable to UICI.

Liquidity and
Capital Resources

Overview of
Cash Resources

At
June 30,  2005,  our  cash  and  cash  equivalents  amounted  to  $6.5  million  compared
to  $3.9  million  at  December  31,  2004 and $2.6  million at March 31,  2005.  The
sources  and uses of cash  during the first six months of 2005  are  described  more
fully  in  -  Analysis  of Cash  Flows below.  The Company  entered  into a
Purchase  Agreement  with  Tak  Investments,  Inc.,  which  closed on May 13,  2005,  and
which  provided  the  Company  with an  additional  source  of  liquidity as more fully
described  in  Overview  Financing  Transaction above.  Upon
closing,  the Company received $5.0  million in gross  proceeds in exchange  for
2,222,222  shares  of the  Companys  common  stock and  warrants.  Additionally,
the Company has taken other  actions to address its  operating  losses,  which have
historically  resulted in declining  cash  balances.  These  steps  include  increasing
the  Companys  marketing  and  sales  efforts  and  implementing  further
productivity  improvements.  The  Companys  focus  is  on  revenue  generation and
positive cash flow,  however there can  be no  assurances  if or when  that  will  occur.
We  believe  that the Company will  maintain  sufficient  liquidity to fund  operations
for at least the next 12 months.

Analysis of
Cash Flows

Cash
used in operating activities for the six months ended June 30, 2005 was
approximately $1.4 million as compared to $1.5 million for the same period in
2004. The reduced net loss in 2005 was offset by changes in various working
capital accounts, primarily accounts receivable. Changes in working capital
generated $18,000 cash in the 2005 period as opposed to $739,000 million cash
generated for the comparable period in 2004.

Cash
used in investing activities for the six months ended June 30, 2005 was
$357,000 as compared to $354,000 for the same period in 2004. The Companys
investing activities continue to be primarily in the areas of developing software
enhancements, contract start-up activities and acquisition of property, equipment
and software. The primary use of cash in the 2005 period was $307,000 of
property, equipment and software. This excludes $254,000 of furniture and fixtures
acquired with a capital lease in connection with the new office lease, entered into
in April 2005, for relocation of the Companys headquarters. See-
Lease and Other Commitments below.

Cash
generated in financing activities for the six months ended June 30, 2005 was
approximately $4.3 million as compared to cash used of $221,000 for the same
period in 2004. Proceeds from the sale of common stock in May 2005 as further
described in  Overview Financing Transaction above was the
source of $4.3 million in cash, net of all closing and transaction costs. In
addition, $223,000 preferred stock dividend payments were made in January 2004.
In June 2004, the terms of the preferred stock were amended and now contain only a
nominal dividend aggregating to less than $1,000 per year. See -Overview
 Preferred Stock above. Principle payments on our note payable to
UICI of $327,000 during 2005 and $303,000 in the comparable period in 2004 were
netted against accounts receivable from UICI. The Consolidated Statements of Cash
Flows for the six months ended June 30, 2004 have been reclassified to reflect this
as a non-cash financing activity. See  - Note Payable to UICI below.

Page 16 of 27

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Note Payable to
UICI

On
September  30,  2003,  the Company  purchased  all  Healthaxis  securities  held by UICI
for  $3.9  million.  The  UICI holdings  included  2,585,769 shares of Healthaxis common
stock,  or  48.3% of the  Companys  then  outstanding  common  stock;  1,424 shares
of Series A Convertible  preferred stock,  or  6.1%  of  the  then  outstanding
preferred  stock;  and  warrants  to  purchase  22,240  shares  of common  stock.  The
repurchased  securities  were  retired.  The  total  purchase  price of $3.9 million
included  $500,000 cash at closing,  and  a $3.4  million  promissory  note,  which  is
due  over  three  years  and  bears  interest  at 6%.  Monthly  payments  on the
promissory  note are paid through  deductions from the monthly  invoices  for  services
provided  by the  Company  to certain  UICI  subsidiaries.  The  amount  of the  monthly
payment  is  equal to the  greater  of one half of the  invoice  amount for  such
services  or  $65,000.  A balloon  principal  payment is  due at the  maturity  of the
note if the  note  has not  been  paid  through  the  monthly  payments.  During  the
six-month  period  ended  June  30,  2005,  the  Company  netted  against  accounts
receivable  an  aggregate  of  $403,000  under  the  promissory  note, of which  $327,000
was principal and $76,000  was  interest.  This  is  reflected  as a  non-cash  financing
transaction in the Companys  Consolidated  Statements of Cash  Flows.  As of  June
30,  2005,  the  balance  due  under  the  promissory  note  is  $2.4  million  (of
which  $657,000  is  classified as short-term).

Lease and Other
Commitments

Healthaxis
has certain  capital and operating  lease  commitments  over  the  next  five  years.
These  leases  are  primarily  for  office  space and data  processing  equipment.  In
April  2005,  the  Company  entered  into  a  lease  for  approximately  20,000  square
feet of office space  located at  7301 North State  Highway 161,  Irving,  Texas.  The
new lease  was entered into with the intent of  relocating  the corporate  headquarters
from  the  present  location  at  5215  North  OConnor  Blvd,  Irving,  Texas,
where the  Company  occupies  approximately  31,300 square feet.  Lease  payments on the
new  lease will start on January  1,  2006,  which  coincides  with  the  termination  of
the  North  OConnor  Blvd.  lease  on  December 31,  2005.  The new lease also
provides  terms under  which  ownership of certain  furniture and  equipment  will be
conveyed  to the  Company in April  2007,  providing  that the  Company  has met  its
obligations  under  the  lease  at that  time.  While the Company  plans to  continue to
make  payments  on the North  OConnor  lease until its expiration in December
2005,  the  relocation  of  employees,  equipment  and related  materials was
substantially  completed in the second  quarter  of 2005.  As such,  the  Company
accrued a lease  abandonment  charge,  based upon the future lease payment  obligation as
of  the  cease-use  date plus  other  relocation  expenses.  Based  upon the  reduced
square  footage  and the lower  rental rate  per square foot of the new  facility,  the
Company  expects a  cash  savings  of over  $700,000  per  year,  including  lease
expenses,  utilities,  parking, and property taxes, commencing  in January 2006.

Healthaxis
has  no  other  significant  cash  commitments  other  than  those  required  by  the
normal  day-to-day operation of its business.

Recently
Adopted Accounting Pronouncements

None

Item 3.
Quantitative and Qualitative Disclosures About Market Risk

Exposure
to market  risk for  changes  in  interest  rates  relate  primarily  to  short-term
investments.  The  Company does not use  derivative  financial  instruments.  The
primary  objective  of  its  investment  activities  is  to  preserve  principal  while
maximizing  yields  without  significantly  increasing  risk.  Due  to  the  nature  of
the  Companys  investments,  we believe  that there is no material  risk exposure.

Our
cash  equivalents  and  other  investment  instruments  are  exposed  to  financial
market  risk  due to  fluctuation in interest  rates,  which may affect our interest
income.  These  instruments  are not entered  into for trading  purposes.  We  do  not
expect  our  interest  income  to  be  significantly  affected by a sudden change in
market  interest  rates.

Page 17 of 27

---



The
dividend  rate on our  preferred  stock is fixed  at a nominal  rate of $0.0001  per
share of the new  preferred  stock,  payable  semi-annually  (aggregating  less than
$1,000  in  dividend  payments  to  all  preferred  shareholders  annually).  The
interest  rate on our note  payable  is fixed  at 6%.  The  fair  value  of these
instruments  is  therefore  subject to market fluctuation as interest rates change.

Item 4.
Controls and Procedures

As
of  the  end  of  the  period  covered  by  this  quarterly  report,  the  Company
carried  out an  evaluation,  under  the  supervision  and  with  the  participation  of
the  Company  management,  including the Companys  Chief Executive  Officer and
Chief Financial  Officer,  of the effectiveness of  the  design  and  operation  of  the
Companys  disclosure  controls and  procedures  pursuant to Securities  Exchange
Act  Rule 13a-14.  Based on that  evaluation,  the Chief  Executive  Officer and the
Chief  Financial  Officer have  concluded that  these  disclosure  controls and
procedures are effective as of  the end of the  period  covered  by  this  report.  There
has  been  no  change  in  the  Companys  internal  control  over  financial
reporting  that occurred  during the period covered  by  this  report  that  has
materially  affected,  or  is  reasonably  likely  to  materially  affect,  the  Companys
internal control over financial reporting.

Page 18 of 27

---



PART II. OTHER
INFORMATION

Item 1. Legal
Proceedings.

The
Company  is  involved  in  litigation  arising in the  ordinary  course of its  business.
Management  is of the opinion that no currently  pending  litigation  will  have a
material  adverse  effect on the  Companys  results of  operations or financial
position.

Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.

Following
approval by the Companys  common  shareholders,  on May 13, 2005 the Company
closed a financing  transaction with Tak  Investments,  Inc. (the  Investor),
a  Delaware  corporation  owned  by Mr.  Sharad  Tak.  Under  the  terms  and  conditions
of  the  Stock  and  Warrant  Purchase  Agreement  with the Investor (the Purchase
Agreement),  the  Company  issued  to the  Investor  2,222,222  shares of common
stock  at  a  per  share  purchase  price  of  $2.25  for  an  aggregate  initial
investment of $5.0  million.  The Investor  also  received  at  the  Closing  three
warrants  (the  Warrants).  The  first  Warrant,  which  provides  for  an
exercise  price of $2.25 per share of common  stock and a term  of two years,  permits
the Company to call the  exercise of up  to  3,333,333  shares  of  common  stock  under
certain  conditions,  but only  permits the  Investor  to exercise  the  Warrant  for up
to  2,222,222  shares  of  common  stock.  The  Companys  ability to call the
exercise of the first  Warrant  is  subject  to  the  satisfaction  of  certain
conditions,  including  unanimous  approval of such action by the Companys  Board
of  Directors  (which  requires  the  approval  of  the  Investors  designees  to
the  Board).  The  Investor  also  received two  additional  warrants  representing  the
right to  purchase  additional  shares  of  common  stock.  The  second  warrant,  which
has  an  exercise  price  of  $2.70  and  a  three-year  term,  permits  the  Investor
to  purchase  up to  1,388,889  additional  shares of common stock.  Of that total,
555,556  shares are  immediately  available to be exercised by  the  Investor  and
833,333  shares  are  dependent  upon  the  amount  ultimately  invested  under  the
first  warrant.  The  third  warrant,  which  has an  exercise  price of $3.15 and a
four-year  term,  permits  the  Investor  to  purchase  up  to  1,388,889  additional
shares of common stock.  Of that total,  555,556  shares are  immediately  available to
be exercised by  the  Investor  and  833,333  shares  are  dependent  upon  the  amount
ultimately exercised under the first warrant.

The
sale of  these  securities  was  exempt  from  registration  by  virtue  of Rule  506 of
Regulation  D  promulgated under the Securities Act of 1933.

Item 3.
Defaults Upon Senior Securities.

Not
applicable

Item 4.
Submission of Matters to a Vote of Security Holders.

A
Special Meeting of Common Shareholders of  Healthaxis Inc. was held on May 11, 2005 in
Irving, Texas  for the purpose of approving the financing transaction  contemplated by
the Purchase Agreement, subject to certain  investor rights and registration rights.  The
vote was as  follows:

|Shares Voted For |  | PercentageVoted For |  | Shares VotedAgainst |  | Shares
      Abstained
|---------------- |  | ------------------- |  | ------------------- |  | ----------------------
|                 |  |                     |  |                     |  |                       
|1,837,250        |  | 88.1%               |  | 208,448             |  | 40,253                

Page 19 of 27

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The
Annual Meeting of the Common Shareholders of  Healthaxis Inc. was held on June 29, 2005
in Irving, Texas  for the purpose of considering and acting upon the following:

|Proposal                                           |  |  | Shares
      Voted
      For |           | PercentageVoted For |  | Shares
      VotedAgainst |   | Shares Abstained |        
|-------------------------------------------------- |  |  | ---------------------------- | --------- | ------------------- |  | ------------------------- | - | ---------------- | -------
|                                                   |  |  |                              |           |                     |  |                           |   |                  |        
|#1 Election
      of Directors:                    |  |  |                              |           |                     |  |                           |   |                  |        
|                                                   |  |  |                              |           |                     |  |                           |   |                  |        
|James
      J. Byrne                               |  |  |                              | 4,416,147 |                     |  | 92.2                      | % |                  | 371,531
|John
      W. Coyle                                |  |  |                              | 4,418,997 |                     |  | 92.3                      | % |                  | 368,681
|Thomas
      L. Cunningham                         |  |  |                              | 4,424,947 |                     |  | 92.4                      | % |                  | 362,731
|Adam
      J. Gutstein                             |  |  |                              | 4,416,197 |                     |  | 92.2                      | % |                  | 371,481
|Kevin
      F. Hickey                              |  |  |                              | 4,422,147 |                     |  | 92.4                      | % |                  | 365,561
|James
      W. McLane                              |  |  |                              | 4,394,497 |                     |  | 91.8                      | % |                  | 393,181
|                                                   |  |  |                              |           |                     |  |                           |   |                  |        
|#2 Approval
      of the 2005 Incentive Stock Plan |  |  |                              | 2,558,544 |                     |  | 81.8                      | % |                  | 567,970
|                                                   |  |  |                              |           |                     |  |                           |   |                  |        
|#3
      Ratification of McGladrey and Pullen, LLP |  |  |                              | 4,773,632 |                     |  | 99.7                      | % |                  | 13,576 
|as the
      Companys independent public          |  | 
|accountants                                        |  | 

Item 5. Other
Information.

Not
Applicable.

Item 6.
Exhibits

|10.1 |  | Stock
and  Warrant  Purchase  Agreement  dated  as  of  February  23,  2005,  between
Healthaxis  Inc.  and  Tak  Investments,  Inc.  (incorporated  by  reference  to  Exhibit
10.1  to  the  Form  8-K  filed  May  17,  2005).
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 |  | Warrant
(#1)  executed  by  Healthaxis  Inc.  in  favor  of  Tak  Investments,  Inc.  for  up  to
3,333,333  common  shares  (incorporated  by  reference  to  Exhibit  10.2  to  the  Form
8-K  filed  May  17,  2005).
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.3 |  | Warrant
(#2)  executed  by  Healthaxis  Inc.  in  favor  of  Tak  Investments,  Inc.  for  up  to
1,388,889  common  shares  (incorporated  by  reference  to  Exhibit  10.3  to  the  Form
8-K  filed  May  17,  2005).
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.4 |  | Warrant
(#3)  executed  by  Healthaxis  Inc.  in  favor  of  Tak  Investments,  Inc.  for  up  to
1,388,889  common  shares  (incorporated  by  reference  to  Exhibit  10.4  to  the  Form
8-K  filed  May  17,  2005).
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.5 |  | Investor
Rights  Agreement  dated  as  of  May  13,  2005  between  Healthaxis  Inc.  and  Tak
Investments,  Inc.  (incorporated  by  reference  to  Exhibit  10.5  to  the  Form  8-K
filed  May  17,  2005).
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Page 20 of 27

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|10.6 |  | Registration
Rights  Agreement  dated  as  of  May  13,  2005  between  Healthaxis  Inc.  and  Tak
Investments,  Inc.  (incorporated  by  reference  to  Exhibit  10.6  to  the  Form  8-K
filed  May  17,  2005).
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.7 |  | Remote
Resourcing  Agreement  dated  as  of  May  13,  2005  between  Healthaxis,  Ltd.  and
Healthcare  BPO  Partners,  L.P.  (incorporated  by  reference  to  Exhibit  10.7  to
the  Form  8-K  filed  May  17,  2005).
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.8 |  | Amendment
to  Change  in  Control  Employment  Agreement  dated  May  13,  2005  between
Healthaxis,  Ltd.  and  James  W.  McLane  (incorporated  by  reference  to  Exhibit
10.8  to  the  Form  8-K  filed  May  17,  2005).
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.9 |  | Amendment
to  Change  in  Control  Employment  Agreement  dated  May  13,  2005  between
Healthaxis,  Ltd.  and  John  M.  Carradine  (incorporated  by  reference  to  Exhibit
10.9  to  the  Form  8-K  filed  May  17,  2005).
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.10 |  | Amendment
to  Change  in  Control  Employment  Agreement  dated  May  13,  2005  between
Healthaxis,  Ltd.  and  J.  Brent  Webb  (incorporated  by  reference  to  Exhibit  10.10
to  the  Form  8-K  filed  May  17,  2005).
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.11 |  | Amendment
to  Change  in  Control  Employment  Agreement  dated  May  13,  2005  between
Healthaxis,  Ltd.  and  Jimmy  D.  Taylor  (incorporated  by  reference  to  Exhibit
10.11  to  the  Form  8-K  filed  May  17,  2005).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.12 |  | Employment
Agreement  between  Healthaxis,  Ltd.  and  Lawrence  F.  Thompson  dated  May  13,  2005
(incorporated  by  reference  to  Exhibit  10.1  to  the  Form  8-K  filed  May  18,
2005).
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|31.1 |  | Certification
of  Chief  Executive  Officer  pursuant  to  Section  302  of  the  Sarbanes-Oxley  Act
of  2002,  filed herewith.
|---- |  | --------------------------------------------------------------------------------------------------------------------------------

|31.2 |  | Certification
of  Chief  Financial  Officer  pursuant  to  Section  302  of  the  Sarbanes-Oxley  Act
of  2002,  filed herewith.
|---- |  | --------------------------------------------------------------------------------------------------------------------------------

|32.1 |  | Certifications
of  Chief  Executive  Officer  and  Chief  Financial  Officer  Pursuant  to  Section  906
of  the  Sarbanes-Oxley  Act  of  2002,  furnished  herewith.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

Page 21 of 27

---



Signature

Pursuant
to  the  requirements  of  the  Securities  Exchange  Act of 1934,  the  registrant  has
duly  caused this  report  to  be  signed  on  its  behalf  by  the  undersigned
thereunto duly authorized.

|                      | Healthaxis
      Inc.                                                                    
|--------------------- | -----------------------------------------------------------------------------------------
|                      |                                                                                          
|Date: August 15, 2005 | By: /s/
      James W. McLane                                                            
|                      |                                                                                          
|                      | James
      W. McLane, Chairman and Chief Executive Officer (Principal Executive Officer)
|                      |                                                                                          
|                      | By: /s/
      Jimmy D. Taylor                                                            
|                      |                                                                                          
|                      | Jimmy
      D. Taylor, Chief Financial Officer (Principal Financial Officer)             

Page 22 of 27

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Exhibit Index

|10.2 |  | Stock
and  Warrant  Purchase  Agreement  dated  as  of  February  23,  2005,  between
Healthaxis  Inc.  and  Tak  Investments,  Inc.  (incorporated  by  reference  to  Exhibit
10.1  to  the  Form  8-K  filed  May  17,  2005).
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 |  | Warrant
(#1)  executed  by  Healthaxis  Inc.  in  favor  of  Tak  Investments,  Inc.  for  up  to
3,333,333  common  shares  (incorporated  by  reference  to  Exhibit  10.2  to  the  Form
8-K  filed  May  17,  2005).
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.3 |  | Warrant
(#2)  executed  by  Healthaxis  Inc.  in  favor  of  Tak  Investments,  Inc.  for  up  to
1,388,889  common  shares  (incorporated  by  reference  to  Exhibit  10.3  to  the  Form
8-K  filed  May  17,  2005).
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.4 |  | Warrant
(#3)  executed  by  Healthaxis  Inc.  in  favor  of  Tak  Investments,  Inc.  for  up  to
1,388,889  common  shares  (incorporated  by  reference  to  Exhibit  10.4  to  the  Form
8-K  filed  May  17,  2005).
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.5 |  | Investor
Rights  Agreement  dated  as  of  May  13,  2005  between  Healthaxis  Inc.  and  Tak
Investments,  Inc.  (incorporated  by  reference  to  Exhibit  10.5  to  the  Form  8-K
filed  May  17,  2005).
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.6 |  | Registration
Rights  Agreement  dated  as  of  May  13,  2005  between  Healthaxis  Inc.  and  Tak
Investments,  Inc.  (incorporated  by  reference  to  Exhibit  10.6  to  the  Form  8-K
filed  May  17,  2005).
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.7 |  | Remote
Resourcing  Agreement  dated  as  of  May  13,  2005  between  Healthaxis,  Ltd.  and
Healthcare  BPO  Partners,  L.P.  (incorporated  by  reference  to  Exhibit  10.7  to
the  Form  8-K  filed  May  17,  2005).
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.8 |  | Amendment
to  Change  in  Control  Employment  Agreement  dated  May  13,  2005  between
Healthaxis,  Ltd.  and  James  W.  McLane  (incorporated  by  reference  to  Exhibit
10.8  to  the  Form  8-K  filed  May  17,  2005).
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.9 |  | Amendment
to  Change  in  Control  Employment  Agreement  dated  May  13,  2005  between
Healthaxis,  Ltd.  and  John  M.  Carradine  (incorporated  by  reference  to  Exhibit
10.9  to  the  Form  8-K  filed  May  17,  2005).
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.10 |  | Amendment
to  Change  in  Control  Employment  Agreement  dated  May  13,  2005  between
Healthaxis,  Ltd.  and  J.  Brent  Webb  (incorporated  by  reference  to  Exhibit  10.10
to  the  Form  8-K  filed  May  17,  2005).
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.11 |  | Amendment
to  Change  in  Control  Employment  Agreement  dated  May  13,  2005  between
Healthaxis,  Ltd.  and  Jimmy  D.  Taylor  (incorporated  by  reference  to  Exhibit
10.11  to  the  Form  8-K  filed  May  17,  2005).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.12 |  | Employment
Agreement  between  Healthaxis,  Ltd.  and  Lawrence  F.  Thompson  dated  May  13,  2005
(incorporated  by  reference  to  Exhibit  10.1  to  the  Form  8-K  filed  May  18,
2005).
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Page 23 of 27

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|31.1 |  | Certification
of  Chief  Executive  Officer  pursuant  to  Section  302  of  the  Sarbanes-Oxley  Act
of  2002,  filed herewith.
|---- |  | --------------------------------------------------------------------------------------------------------------------------------

|31.2 |  | Certification
of  Chief  Financial  Officer  pursuant  to  Section  302  of  the  Sarbanes-Oxley  Act
of  2002,  filed herewith.
|---- |  | --------------------------------------------------------------------------------------------------------------------------------

|32.1 |  | Certifications
of  Chief  Executive  Officer  and  Chief  Financial  Officer  Pursuant  to  Section  906
of  the  Sarbanes-Oxley  Act  of  2002,  furnished  herewith.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

Page 24 of 27

---