UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

            [X] QUARTER REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 2003
                                       OR
            [ ] 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 0-31014

                               HEALTHEXTRAS, INC.
             (Exact name of registrant as specified in its charter)



<TABLE>
<CAPTION>


<S>                                                   <C>
Delaware                                              52-2181356
-------------------------------                       ----------
(State or other Jurisdiction of                       (IRS Employer
incorporation)                                        Identification No.)
</TABLE>


          2273 Research Boulevard, 2nd Floor, Rockville, Maryland 20850
          -------------------------------------------------------------
                    (Address of principal executive offices)

                                 (301) 548-2900
               --------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
          ------------------------------------------------------------
         (Former name or former address, if changed since last report.)



 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.   Yes X   No
                                               ---

Indicate  by check mark  whether the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act)  Yes X   No
                                               ---
As of August 12, 2003, there were 32,449,250 shares outstanding of the
Registrant's $0.01 par value common stock.



<PAGE>





                               HEALTHEXTRAS, INC.

                          Second Quarter 2003 Form 10-Q

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                          Page
                                                                          ----
PART I   FINANCIAL INFORMATION

<S>                                                                      <C>
    Item 1.     Financial Statements

      Consolidated Balance Sheets as of December 31, 2002 and June 30,
        2003 (Unaudited)......................................................1

      Consolidated Statements of Operations for the Six
           Months Ended June 30, 2002 and 2003 (Unaudited)....................2

      Consolidated Statements of Cash Flows for the Six Months Ended
           June 30, 2002 and 2003 (Unaudited).................................3

      Notes to Financial Statements...........................................4

    Item 2.     Management's Discussion and Analysis of Financial Condition
                   and Results of Operations.................................10

    Item 3.     Quantitative and Qualitative Disclosures About Market Risk...15

    Item 4.     Controls and Procedures......................................15

PART II  OTHER INFORMATION

    Item 1.     Legal Proceedings............................................15

    Item 2.     Changes in Securities........................................15

    Item 3.     Defaults Upon Senior Securities..............................15

    Item 4.     Submission of Matters to a Vote of Security Holders..........15

    Item 5.     Other Information............................................15

    Item 6.     Exhibits and Reports on Form 8-K.............................16

SIGNATURES

</TABLE>

<PAGE>

PART I.  FINANCIAL INFORMATION
ITEM I.  Financial Statements

                               HEALTHEXTRAS, INC.
                          CONSOLIDATED BALANCE SHEETS
                                  (Unaudited)
<TABLE>
<CAPTION>

                                                                                   December 31,       June 30,
                                                                                      2002             2003
                                                                                 -------------     ------------
<S>                                                                             <C>                <C>
  ASSETS
Current assets:
  Cash and cash equivalents ..................................................   $  17,531,051    $  26,162,251
  Accounts receivable, net ...................................................      37,799,778       39,824,162
  Income taxes receivable ....................................................       2,773,773        1,644,580
  Deferred income taxes ......................................................       1,286,313        1,286,313
  Deferred charges ...........................................................       1,888,072        1,969,137
  Other current assets .......................................................       1,282,484        1,199,076
                                                                                 -------------     ------------
        Total current assets .................................................      62,561,471       72,085,519

Fixed assets, net ............................................................       4,056,130        3,398,537
Deferred income taxes ........................................................       3,759,152        1,636,104
Intangible assets, net .......................................................      14,185,751       13,777,773
Goodwill .....................................................................      33,538,142       33,666,142
Other assets .................................................................       1,901,490        1,840,909
                                                                                 -------------     ------------
        Total assets .........................................................   $ 120,002,136    $ 126,404,984
                                                                                 =============    =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable ...........................................................   $  34,451,789    $  40,943,439
  Note payable ...............................................................       1,056,000             --
  Accrued expenses and other current liabilities .............................       2,156,165        2,231,203
  Deferred revenue ...........................................................       4,813,555        5,227,282
                                                                                 -------------     ------------
        Total current liabilities ............................................      42,477,509       48,401,924

Note payable .................................................................      18,000,000       14,000,000
                                                                                 -------------     ------------
       Total liabilities ....................................................       60,477,509       62,401,924

Stockholders' equity:
  Preferred stock, $0.01 par value, 5,000,000 shares authorized,
     none issued .............................................................              --               --
  Common stock, $0.01 par value, 100,000,000 shares authorized, 32,295,120
     and 32,414,115 shares issued and outstanding at
     December 31, 2002 and June 30, 2003, respectively .......................         322,951          324,141
  Additional paid-in capital .................................................      70,460,184       70,810,251
  Accumulated deficit ........................................................     (11,243,127)      (7,131,332)
  Deferred compensation ......................................................         (15,381)              --
                                                                                 -------------     ------------
        Total stockholders' equity ...........................................      59,524,627       64,003,060
                                                                                 -------------     ------------
        Total liabilities and stockholders' equity ...........................   $ 120,002,136    $ 126,404,984
                                                                                 =============    =============
</TABLE>


   The accompanying notes are an integral part of these financial statements
                                       1


<PAGE>

                               HEALTHEXTRAS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                For the three months ended       For the six months ended
                                                                          June 30,                       June 30,
                                                               -----------------------------   ------------------------------
                                                                    2002             2003           2002            2003
                                                               -------------   -------------   -------------    -------------
<S>                                                            <C>             <C>             <C>              <C>
Revenue ....................................................   $  55,248,679   $  94,114,780   $ 109,900,934    $ 185,849,641
                                                               -------------   -------------   -------------    -------------

Direct expenses ............................................      44,658,926      83,863,324      89,317,012      166,323,430
Selling, general and administrative expenses ...............       9,003,208       6,492,387      18,424,809       12,561,305
                                                               -------------   -------------   -------------    -------------
        Total operating expenses ...........................      53,662,134      90,355,711     107,741,821      178,884,735
                                                               -------------   -------------   -------------    -------------

        Operating income ...................................       1,586,545       3,759,069       2,159,113        6,964,906

Interest expense, net ......................................          59,738         114,330           3,606          263,111
                                                               -------------   -------------   -------------    -------------

        Income before income taxes and minority interest ...       1,526,807       3,644,739       2,155,507        6,701,795

Minority interest ..........................................              --              --         (44,992)              --
                                                               -------------   -------------   -------------    -------------

        Income before income taxes .........................       1,526,807       3,644,739       2,110,515        6,701,795

Provision for income taxes .................................              --       1,407,000              --        2,590,000
                                                               -------------   -------------   -------------    -------------

        Net income .........................................   $   1,526,807   $   2,237,739   $    2,110,515    $   4,111,795
                                                               =============   =============   ==============    =============

Earnings per share, basic ..................................   $        0.05   $        0.07            0.07    $        0.13
Earnings per share, diluted ................................   $        0.05   $        0.07            0.07    $        0.13

Weighted average shares of common stock, basic
  (in thousands) ...........................................          32,291          32,403          32,160           32,370
Weighted average shares of common stock outstanding, diluted
  (in thousands) ...........................................          32,501          33,280          32,280           32,783

</TABLE>


   The accompanying notes are an integral part of these financial statements
                                       2



<PAGE>


                               HEALTHEXTRAS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                                  For the six months ended
                                                                           June 30,
                                                                 ----------------------------
                                                                      2002           2003
                                                                 ------------    ------------
<S>                                                             <C>              <C>
Cash flows from operating activities:
  Net income .................................................   $  2,110,515    $  4,111,795
  Depreciation expense .......................................        655,938         775,461
  Deferred income taxes ......................................             --       2,590,000
  Income taxes receivable ....................................             --         662,241
  Noncash charges (credits) ..................................       (950,070)        100,068
  Loss on disposal of fixed asset ............................        115,821              --
  Amortization of intangibles and other assets ...............        194,139         407,978
  Minority interest ..........................................         44,992              --
  Changes in assets and liabilities:
     Accounts receivable, net ................................      1,000,637      (2,024,384)
     Other assets ............................................       (419,949)        143,989
     Deferred charges ........................................     (1,163,391)        (81,065)
     Accounts payable, accrued expenses, and other liabilities     (8,278,342)      6,566,688
     Deferred revenue ........................................        223,940         413,727
                                                                 ------------    ------------
        Net cash (used in) provided by operating activities ..     (6,465,770)     13,666,498
                                                                 ------------    ------------

Cash flows from investing activities:
  Capital expenditures .......................................       (632,367)       (117,868)
  Deposits, restricted cash and other ........................        600,000              --
  Purchase of intangible assets ..............................       (300,000)             --
  Business acquisitions and related payments .................     (9,961,603)     (1,056,000)
                                                                 ------------    ------------
        Net cash used in investing activities ................    (10,293,970)     (1,173,868)
                                                                 ------------    ------------

Cash flows from financing activities:
  Proceeds received from exercise of stock options ...........         33,469         138,570
  Borrowings (repayments) under line of credit, net ..........      8,000,000      (4,000,000)
                                                                 ------------    ------------
        Net cash provided by (used in) financing activities ..      8,033,469      (3,861,430)
                                                                 ------------    ------------

Net (decrease) increase in cash and cash equivalents .........     (8,726,271)      8,631,200

Cash and cash equivalents at the beginning
  of period ..................................................     33,009,143      17,531,051
                                                                 ------------    ------------
Cash and cash equivalents at the end of period ...............   $ 24,282,872    $ 26,162,251
                                                                 ============    ============
</TABLE>

   The accompanying notes are an integral part of these financial statements
                                       3

<PAGE>





                               HEALTHEXTRAS, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

1.   BASIS OF PRESENTATION
--   ---------------------

         The accompanying  consolidated  financial statements have been prepared
by HealthExtras,  Inc. (the "Company")  pursuant to the rules and regulations of
the  Securities  and  Exchange  Commission  (the  "SEC") for  interim  financial
reporting.  These  consolidated  financial  statements are unaudited and, in the
opinion of management,  include all adjustments,  consisting of normal recurring
adjustments and accruals,  necessary for a fair presentation of the consolidated
balance  sheets,  statements of operations  and statements of cash flows for the
periods presented. Operating results for the six months ended June 30, 2003, are
not  necessarily  indicative  of the result  that may be  expected  for the year
ending December 31, 2003. Certain information and footnote  disclosures normally
included in the  financial  statements  prepared in accordance  with  accounting
principles  generally  accepted  in the  United  States  have  been  omitted  in
accordance  with  the  rules  and  regulations  of the SEC.  These  consolidated
financial statements should be read in conjunction with the audited consolidated
financial  statements and accompanying  notes,  included in the Company's Annual
Report on Form 10-K for the year ended  December 31, 2002, as filed with the SEC
on March 31, 2003.  Certain  prior  period  amounts  have been  reclassified  to
conform to the current period presentation.

2.   RECENT ACCOUNTING PRONOUNCEMENTS
--   --------------------------------

     SFAS NO. 148

         In December 2002,  the Financial  Accounting  Standards  Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 148, "Accounting
for Stock-Based  Compensation - Transition and Disclosure,  an amendment of FASB
Statement No. 123", to provide alternative methods of transition for a voluntary
change to the fair value based method of  accounting  for  stock-based  employee
compensation.  In addition,  SFAS No. 148 amends the disclosure  requirements of
FASB  statement  No. 123 to require  prominent  disclosures  in both  annual and
interim  financial  statements  about the method of accounting  for  stock-based
employee compensation and the effect of the method used on reported results. The
application of the transition provisions of SFAS No. 148 is effective for fiscal
years  ending  after  December  15,  2002.  The Company has  included the proper
disclosures in Note 3 to these Notes To Financial Statements.

     FIN NO. 45

         In November 2002, the FASB issued FASB  Interpretation  ("FIN") No. 45,
"Guarantor's  Accounting and Disclosure  Requirements  for Guarantees  Including
Indirect  Guarantees  of  Indebtedness  of  Others",  which  elaborates  on  the
disclosures  to be made by a  guarantor  in its  interim  and  annual  financial
statements about its obligations under certain guarantees that it has issued. It
also clarifies that a guarantor is required to recognize,  at the inception of a
guarantee,  a  liability  for the fair  value of the  obligation  undertaken  in
issuing  the  guarantee.   The  initial   recognition  and  initial  measurement
provisions of FIN No. 45 are  applicable  on a  prospective  basis to guarantees
issued or modified  after  December 31, 2002,  irrespective  of the  guarantor's
fiscal  year end.  The  disclosure  requirements  are  effective  for  financial
statements of interim or annual  periods  ending after  December 15, 2002. As of
June 30, 2003,  there is no impact on the  Company's  financial  statements as a
result of the issuance of FIN No. 45.


                                       4
<PAGE>



3.   STOCK-BASED COMPENSATION
--   ------------------------

         At June 30, 2003, the Company has  stock-based  compensation  plans for
employees and  directors.  Stock-based  compensation  is accounted for using the
intrinsic-value-based  method in accordance with the Accounting Principles Board
Opinion  ("APB") 25,  "Accounting  for Stock Issued to  Employees,"  and related
Interpretations.  No stock-based compensation expense is reflected in net income
as all options  granted  under  these  plans had an exercise  price equal to the
market  value of the  underlying  common  stock on issue date of the grant.  The
following  table  illustrates the effect on net income and earnings per share if
the  Company  had applied  the fair value  recognition  provisions  of SFAS 123,
"Accounting for Stock-Based Compensation", to stock-based employee compensation:


<TABLE>
<CAPTION>

                                                           Three months ended            Six months ended
                                                                 June 30,                    June 30,
                                                            2002          2003          2002          2003
                                                        -----------   -----------   -----------    -----------
<S>                                                     <C>           <C>           <C>            <C>
Net income, as reported ..............................  $ 1,526,807   $ 2,237,739   $ 2,110,515    $ 4,111,795
Deduct:  Total stock-based employee compensation
   expense determined under fair value method for
   all awards (net of related tax effect for the three
   and six month periods ended June 30, 2003 of
   $388,640 and $763,248, respectively) ..............      830,998       615,116     1,347,135      1,213,055
                                                         ----------   -----------   -----------   ------------
Pro forma net income .................................   $  695,809   $ 1,622,623   $   763,380   $  2,898,740
                                                         ==========   ===========   ===========   ============
Earnings per share:
   Basic - as reported ...............................   $     0.05   $      0.07   $      0.07   $       0.13
   Basic - pro forma .................................   $     0.02   $      0.05   $      0.02   $       0.09
</TABLE>


         The fair value for these options was estimated at the date of the grant
using the Black-Scholes option pricing model with the following weighted average
assumptions for the three and six months ended June 30, 2002 and 2003:


<TABLE>
<CAPTION>

                                  Three months ended              Six months ended
                                       June 30,                        June 30,
                               2002            2003            2002              2003
                            ----------    --------------    ------------    --------------
<S>                         <C>             <C>             <C>             <C>
Expected term .........     5 years         5 years            5 years          5 years
Volatility factor .....       87%        83.26 - 83.67%         87%          83.26 - 87.31%
Risk free interest rate    4.41-5.11%      2.28 - 3.01%     4.41 - 5.11%      2.28 - 3.19%
Dividend yield ........        --            --                  --                --
Fair value ............      $3.17         $4.34               $3.06              $3.61

</TABLE>

4.   BUSINESS COMBINATIONS
--   ---------------------

     ACQUISITION OF CATALYST

         During the first quarter of 2002, the Company purchased the outstanding
20% minority interest in Catalyst Rx, and Catalyst Consultants  ("Catalyst") for
319,033  shares of the Company's  stock valued at $1.1 million and notes payable
of $4.2 million.  The stock was  transferred to the seller on April 1, 2002, and
$3.1 million was paid on the note in 2002,  with the final  installment  of $1.1
million paid on March 1, 2003.

                                       5
<PAGE>



     ACQUISITION OF PNNC

         On December 1, 2002,  the Company  acquired 100% of the common stock of
Pharmacy Network National  Corporation  ("PNNC").  Total  consideration for PNNC
stock was $20.2 million.  Total  acquisition cost included  transaction costs of
approximately  $1.4 million.  Funding for the $21.6 million cash transaction was
derived  from the  Company's  working  capital and  borrowings  under the credit
facility.  The acquisition  resulted in goodwill of approximately  $10.6 million
and intangible assets of $8.0 million.

         The following  table sets forth certain  unaudited  proforma  financial
data  assuming that the  acquisition  of 100% of Catalyst and PNNC had each been
completed  as of January 1, 2002,  after  giving  effect to purchase  accounting
adjustments. Amounts are in thousands, except for per share data.

<TABLE>
<CAPTION>

                                   Three months ended         Six months ended
                                         June 30,                  June 30,
                                  ---------------------   -----------------------
                                    2002          2003       2002         2003
                                  ---------     -------   ----------   ----------
                                  (proforma)   (actual)   (proforma)   (actual)
<S>                               <C>          <C>        <C>          <C>
Revenue .......................   $ 85,675     $ 94,115   $  169,605   $  185,850
Net income ....................   $  2,027     $  2,238   $    3,584   $    4,112
Net income per share basic ....   $   0.06     $   0.07   $     0.11   $     0.13
Net income per share diluted ..   $   0.06     $   0.07   $     0.11   $     0.13
Weighted average shares basic .     32,291       32,403       32,264       32,370
Weighted average shares diluted     32,501       33,280       32,384       32,783
</TABLE>


         The proforma  results of operations are not  necessarily  indicative of
the results that would have  occurred had the Company owned 100% of Catalyst and
PNNC at January 1, 2002,  nor are these results  indicative of future  operating
results.

5.   GOODWILL
--   --------

         The Company adopted SFAS No. 142, and  discontinued the amortization of
goodwill and  indefinite-lived  intangible assets effective January 1, 2002. The
Company  completed  its initial  adoption  impairment  testing of  goodwill  and
concluded that no impairment of goodwill exists. The Company performed a similar
test as of December 31,  2002,  and  concluded  that no  impairment  of goodwill
exists. In the first quarter of 2003, the Company increased goodwill by $128,000
due to additional  acquisition  costs incurred related to the PNNC  acquisition.
There have been no  impairments  or write-downs to goodwill in the three and six
month periods ended June 30, 2003.

6.   INTANGIBLE ASSETS
--   -----------------

         As of June 30, 2003, intangible assets consisted of the following:
<TABLE>
<CAPTION>

                                                                Amortization Period
<S>                                         <C>                        <C>
              Catalyst customer contracts   $    5,700,000             20 years
              PNNC customer contracts            8,000,000             20 years
              Other PBM contracts                  945,200             5 - 10 years
                                            --------------

              Total intangible assets           14,645,200
              Accumulated amortization            (867,427)
                                            --------------
                  Total                     $   13,777,773
                                            ==============
</TABLE>


         Catalyst and PNNC customer contracts represent the estimated fair value
of customer  contracts  held by Catalyst  and PNNC at the dates of  acquisition.
This estimated  fair value and the weighted  average  useful-lives  are based on
income-method  valuation  calculations,  performed by an independent  consulting
firm.

                                       6

<PAGE>



         The  estimated  aggregate  amortization  expense of  intangible  assets
through 2007 is as follows:

         2003     $    816,000
         2004          816,000
         2005          816,000
         2006          816,000
         2007          776,000
                  ------------
         Total    $  4,040,000
                  ============

         Amortization  expense for the three month  periods  ended June 30, 2003
and 2002 was  approximately  $204,000  and  $85,000  respectively.  Amortization
expense for the six month periods ended June 30, 2003 and 2002 was approximately
$408,000 and $151,000, respectively.

7.   CREDIT FACILITY
--   ---------------

         In December  2002,  the Company  arranged  an $18.0  million  revolving
credit facility the term of which was extended  through May 2005.  Borrowings on
the credit facility are  collateralized  by  substantially  all of the Company's
trade  receivables.  The  credit  facility  contains  affirmative  and  negative
covenants related to indebtedness, other liabilities and consolidated net worth.
The facility bears interest at LIBOR plus 2.75%.  The effective rate at June 30,
2003, was 3.79%.  Interest is payable in arrears on the fifth day of each month.
The  outstanding  balance  on the  credit  facility  at June 30,  2003 was $14.0
million.  All principal and accrued interest is due to the bank on May 31, 2005.
Interest  expense  related to notes  payable for the three and six month periods
ended June 30, 2003 were  approximately  $161,000  and  $345,000,  respectively.
Subsequent to June 30, 2003,  an additional  $2.0 million was paid on the credit
facility.  The outstanding  balance on the credit facility on the date of filing
is $12.0 million.

8.   SEGMENT REPORTING
--   -----------------

         The  Company  operates  in  two  business  segments,  pharmacy  benefit
management  ("PBM") and  supplemental  benefits.  The following table represents
financial  data by segment  for the three and six month  periods  ended June 30,
2003, and June 30, 2002.

         For the three months ended June 30, 2003:


<TABLE>
<CAPTION>
                                              Supplemental
                                 PBM           Benefits       Total
                             ------------   -------------  ------------
<S>                          <C>            <C>            <C>

Revenue ..................   $ 80,526,505   $ 13,588,275   $ 94,114,780

Segment operating expenses     77,810,698     11,028,509     88,839,207

Segment operating income .      2,715,807      2,559,766      5,275,573

Total assets .............    109,037,379     17,367,605    126,404,984

Accounts receivable ......     39,635,462        188,700     39,824,162

Accounts payable .........     40,638,873        304,566     40,943,439
</TABLE>


         Operating  expenses of the  segments  exclude $1.5 million in corporate
overhead that was not allocated by management in assessing  segment  performance
for the three month period ended June 30, 2003.

                                       7
<PAGE>

         For the three months ended June 30, 2002:

<TABLE>
<CAPTION>

                                           Supplemental
                                 PBM           Benefits         Total
                             ------------   -------------    ------------
<S>                          <C>            <C>            <C>
Revenue ..................   $ 37,572,648   $  17,676,031    $ 55,248,679

Segment operating expenses     36,127,666      16,665,613      52,793,279

Segment operating income .      1,444,982       1,010,418       2,455,400

Total assets .............     75,019,542       9,647,902      84,667,444

Accounts receivable ......     19,745,173       1,665,158      21,410,331

Accounts payable .........     16,739,209         165,610      16,904,819
</TABLE>

         Operating  expenses  of the  segments  exclude  $869,000  in  corporate
overhead that was not allocated by management in assessing  segment  performance
for the three month period ended June 30, 2002.

         For the six months ended June 30, 2003:

<TABLE>
<CAPTION>

                                             Supplemental
                                 PBM            Benefits       Total
                             ------------    -------------  ------------

<S>                          <C>            <C>            <C>
Revenue ..................   $158,944,636    $ 26,905,005   $ 185,849,641

Segment operating expenses    153,744,728      22,179,716     175,924,444

Segment operating income .      5,199,908       4,725,289       9,925,197
</TABLE>


         Operating  expenses of the  segments  exclude $3.0 million in corporate
overhead that was not allocated by management in assessing  segment  performance
for the six month period ended June 30, 2003.


     For the six months ended June 30, 2002:

<TABLE>
<CAPTION>

                                             Supplemental
                                 PBM            Benefits        Total
                             ------------    -------------  -------------
<S>                          <C>             <C>            <C>

Revenue ..................   $ 72,085,598    $ 37,815,336   $ 109,900,934

Segment operating expenses     70,163,292      35,787,632     105,950,924

Segment operating income .      1,922,306       2,027,704       3,950,010
</TABLE>


         Operating  expenses of the  segments  exclude $1.8 million in corporate
overhead that was not allocated by management in assessing  segment  performance
for the six month period ended June 30, 2002.

                                       8
<PAGE>



9.   PROVISION FOR INCOME TAXES
--   --------------------------

         In the three and six month  periods  ended June 30,  2003,  the Company
recorded a provision  for income  taxes of  approximately  $1.4 million and $2.6
million, respectively. The effective rate of the tax provision is 38.6%. For the
three and six month  periods  ended  June 30,  2002,  the  Company  recorded  no
provision for income taxes, as the Company maintained a full valuation allowance
against the  Company's  deferred tax assets due to the  uncertainty  as to their
ultimate realization.

10.  NET INCOME PER SHARE
---  --------------------

         Basic net income per share is based on the weighted  average  number of
shares outstanding during the period. Diluted income per share is computed based
on the weighted  average number of shares and dilutive  common stock  equivalent
shares outstanding during the period.

         For the three month  period ended June 30,  2003,  the dilutive  effect
(877,000 shares  determined using the treasury stock method) of stock options to
purchase 4.7 million  shares of common stock was included in the  computation of
diluted  earnings per common share  because the option  exercise  price was less
than the  average  market  price of the common  shares  during  the three  month
period. The dilutive effect of 2.2 million  outstanding common stock options and
warrants  for the  period  ended  June  30,  2003  has  been  excluded  from the
computation of diluted net income per share as the effect would be antidilutive.

         For the six month  period  ended June 30,  2003,  the  dilutive  effect
(413,000 shares  determined using the treasury stock method) of stock options to
purchase 2.5 million  shares of common stock was included in the  computation of
diluted  earnings per common share  because the option  exercise  price was less
than the average  market price of the common shares during the six month period.
The dilutive effect of 4.3 million outstanding common stock options and warrants
for the six  month  period  ended  June 30,  2003,  has been  excluded  from the
computation of diluted net income per share as the effect would be antidilutive.

         For the three month  period ended June 30,  2002,  the dilutive  effect
(210,000 shares  determined using the treasury stock method) of stock options to
purchase  671,000  shares of common  stock was  included in the  computation  of
diluted  earnings per common share  because the option  exercise  price was less
than the  average  market  price of the common  shares  during  the three  month
period. The dilutive effect of 3.9 million  outstanding common stock options and
warrants  from the  period  ended  June 30,  2002,  has been  excluded  from the
computation of diluted net income per share as the effect would be antidilutive.

         For the six month  period  ended June 30,  2002,  the  dilutive  effect
(209,000 shares  determined using the treasury stock method) of stock options to
purchase  601,000  shares of common  stock was  included in the  computation  of
diluted  earnings per common shares because the option exercise prices were less
than the average  market price of the common shares during the six month period.
The dilutive effect of 3.9 million outstanding common stock options and warrants
for the six  month  period  ended  June 30,  2002,  has been  excluded  from the
computation of diluted net income per share as the effect would be antidilutive.

                                       9


<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS
------   ---------------------------------------------------------------

         The following discussion should be read in conjunction with the interim
consolidated  financial  statements  presented  in  Item 1.  Certain  statements
contained herein may constitute forward-looking statements (see "Certain Factors
That May Affect Future Operating Results or Stock Prices") within the meaning of
Section  21E  of  the  Securities  Exchange  Act  of  1934,  as  amended.  These
forward-looking  statements  involve  a number of risks  and  uncertainties.  We
undertake no  obligation  to revise any  forward-looking  statements in order to
reflect  events or  circumstances  that may arise after the date of this report.
Readers are urged to carefully review and consider the various  disclosures made
in this  report  and in our  other  filings  with the  Securities  and  Exchange
Commission  that attempt to advise  interested  parties of the risks and factors
that may affect our business.

OVERVIEW
--------

         HealthExtras is a provider of PBM services and  supplemental  benefits.
The  Company's   clients  include   managed-care   organizations,   self-insured
employers, third party administrators,  as well as individual customers. The PBM
segment now generates the  significant  majority of our revenues and is expected
to be the  primary  source of growth and profit  potential  in the  future.  The
acquisitions of Catalyst and PNNC have  contributed  significantly to the growth
of our PBM business.

     PHARMACY BENEFIT MANAGEMENT

         We  have  established  a  nationwide  network  of  over  53,000  retail
pharmacies. In general, clients contract with us to access our negotiated retail
pharmacy  network  rates,   participate  in  certain  rebate  arrangements  with
manufacturers  based  on  formulary  design  and  benefit  from the  other  care
enhancement  protocols in our system.  Our primary PBM  services  consist of the
automated  online  processing of  prescription  claims on behalf of our clients.
When a member of one of our  clients  presents  a  prescription  or health  plan
identification  card to a retail pharmacist in our network,  our system provides
the  pharmacist  with  accesses  to online  information  regarding  eligibility,
patient history,  health plan formulary listings, and contractual  reimbursement
rates.  The member  generally  pays a co-payment to the retail  pharmacy and the
pharmacist fills the prescription.  On behalf of our clients,  we electronically
aggregate  pharmacy benefit claims,  which include  prescription  costs plus our
claims processing fees for consolidated billing and payment. We receive payments
from clients,  remit the amounts owed to the retail  pharmacies  pursuant to our
negotiated rates and retain the difference, including claims processing fees.

         Pharmacy  benefit  claim  payments  from our  clients  are  recorded as
revenues and prescription costs to be paid to pharmacies are recorded as direct
expenses.  Under our network contracts, we have an independent obligation to pay
pharmacies  for the drugs  dispensed  and  accordingly,  have  assumed that risk
independent of our clients. When the Company administers pharmacy  reimbursement
contracts  and does not  assume a credit  risk,  the  Company  records  only its
administrative or processing fees as revenue.  Rebates earned under arrangements
with  manufacturers are recorded as a reduction of direct expenses.  The portion
of manufacturer rebates due to clients is recorded as a reduction of revenue.

         Member  co-payments  are not  recorded as revenue.  Under our  pharmacy
agreements, the pharmacy is solely obligated to collect the co-payments from the
members.  Under our  client  contracts,  we do not assume  liability  for member
co-payments in retail pharmacy  transactions.  As such, we do not include member
co-payments to retail pharmacies in revenue or operating expenses.

         Because the SEC is in the process of reviewing the topic of co-payments
 and whether  co-payments  should or should not be  included  as a component  of
 revenues and operating  expenses in PBM  companies,  we are  providing  certain
 supplemental  information in the tables below. This information may also assist
 investors in  comparing  PBMs with  differing  accounting  policies  related to
 co-payments.  If the SEC should  ultimately  decide that co-payments  should be
 included in reported PBM revenues and operating expenses, it would result in an
 increase in reported PBM revenue and operating expenses for the second quarters
 of  2003  and  2002  of   approximately   $33.6  million  and  $15.9   million,
 respectively, and in an increase in reported PBM revenue and operating expenses
 for the six month periods ended June 30, 2003 and 2002 of  approximately  $67.5
 million and $30.6 million.  Our  consolidated  statements of operations,  which
 include  operating  and net income,  and the  consolidated  balance  sheets and
 statements of cash flows, would not be affected.

                                       10
<PAGE>



         The following tables illustrate the effects on the reported PBM revenue
 and operating  expenses (see Note 8 to these Notes To Financial  Statements) if
 the Company had included member co-payments:


<TABLE>
<CAPTION>

                                       Three months ended              Six months ended
                                              June 30,                     June 30,
                                   ---------------------------   ---------------------------
                                        2002            2003          2002            2003
                                   ------------    -----------   ------------   ------------

<S>                                <C>            <C>            <C>            <C>
Reported PBM revenue               $ 37,572,648   $ 80,526,505   $ 72,085,598   $158,944,636
Member co-payments .............     15,876,464     33,649,952     30,611,484     67,546,985
                                   ------------   ------------   ------------   ------------
  Total ........................   $ 53,449,112   $114,176,457   $102,697,082   $226,491,621
                                   ============   ============   ============   ============
</TABLE>

<TABLE>
<CAPTION>

                                      Three months ended              Six months ended
                                              June 30,                     June 30,
                                   ---------------------------   ---------------------------
<S>                                <C>            <C>            <C>            <C>
Reported PBM
  operating expenses ...........   $ 36,127,666   $ 77,810,698   $ 70,163,292   $153,744,728
Member co-payments .............     15,876,464     33,649,952     30,611,484     67,546,985
                                   ------------   ------------   ------------   ------------
  Total ........................   $ 52,004,130   $111,460,650   $100,774,776   $221,291,713
                                   ============   ============   ============   ============
</TABLE>


     SUPPLEMENTAL BENEFITS PROGRAMS

         The Company's  supplemental benefits segment generates revenue from the
sale of membership  programs  which provide  insurance and other  benefits.  The
Company has distribution  agreements with many of the nation's largest financial
institutions  (the  "distributors"),  along  with  leading  affinity  groups and
associations.  Additionally,  HealthExtras  has a  relationship  with  actor and
advocate Christopher Reeve to promote these benefits programs.

         Revenue is generated by payments for program benefits and payments from
certain  distributors.  In general,  program revenue is recognized  based on the
number of members enrolled in each reporting period multiplied by the applicable
fee  collected  from the member or paid by the  distributor  for their  specific
membership program. The program revenue recognized by HealthExtras  includes the
cost of the  membership  benefits  supplied by others,  including  the insurance
components.  Payments from the  distributors  related to new member  enrollments
were recorded as revenue to the extent of the related  direct  expenses  through
September 30, 2002.  These payments by  distributors  were  discontinued at that
time under restructured marketing agreements.

         Direct expenses consist principally of the cost of benefits provided to
program members,  distributors'  compensation,  and transaction processing fees.
Direct expenses are a function of the level of membership  during the period and
the  specific  set  of  program  features  selected  by  members.  The  coverage
obligations  of our benefit  suppliers  and the related  expense are  determined
monthly, as are the remaining direct expenses.

         Revenue from program  payments  received,  and related direct expenses,
are deferred to the extent that they are  applicable to future periods or to any
refund guarantee we offer. HealthExtras has committed to minimum premium volumes
with respect to the insurance  features of its programs  supplied by others.  In
the event that there were  insufficient  members to utilize the minimum  premium
commitment,  the  differential  would be  expensed  by the  Company  without any
related revenue.  The Company believes that current enrollment trends will allow
the minimum future commitments at June 30, 2003, to be fully utilized by current
enrollment levels.

RESULTS OF OPERATIONS
---------------------

THREE MONTHS ENDED JUNE 30, 2003, COMPARED TO THREE MONTHS ENDED JUNE 30, 2002

         REVENUE.  Revenue from  operations  for the second quarter of 2003, was
$94.1 million,  consisting of $80.5 million in revenue  associated  with the PBM
segment and $13.6 million in revenue  attributable to the supplemental  benefits

                                       11
<PAGE>

segment. PBM segment revenue increased by $42.9 million, including $27.0 million
from PNNC,  while the supplemental  benefits  segment revenue  decreased by $4.1
million. Revenue for the second quarter of 2002 was $55.2 million, consisting of
approximately  $37.5 million and $17.7 million  attributable  to the PBM and the
supplemental benefits segments, respectively.

         DIRECT  EXPENSES.  Direct  expenses for the three months ended June 30,
 2003  were  $83.9  million  consisting  of $73.8  million  in  direct  expenses
 associated   with  the  PBM  segment  and  $10.1  million  in  direct  expenses
 attributable  to  supplemental  benefits  segment.  PBM segment direct expenses
 increased  by $39.0  million,  including  $24.8  million  from PNNC,  while the
 supplemental  benefits  segment  direct  expenses  increased  by  approximately
 $300,000.  Direct  expenses for the second  quarter of 2002 were $44.7  million
 consisting of approximately $34.9 million and $9.8 million  attributable to the
 PBM and supplemental  benefits segments,  respectively.  The direct expenses of
 $83.9  million and $44.7  million for the three  month  periods  ended June 30,
 2003, and June 30, 2002,  represented 92.8% and 83.2% of operating expenses for
 the respective periods.

         SELLING,    GENERAL   AND   ADMINISTRATIVE.    Selling,   general   and
 administrative  expenses for the three month period ended June 30, 2003 totaled
 $6.5 million or 7.2% of operating  expenses,  $4.0 million of which was related
 to the  Company's  PBM services  segment,  $970,000 of which was related to the
 management of the  supplemental  benefits  segment,  while the  remaining  $1.5
 million related to corporate  overhead.  These expenses  include  approximately
 $454,000 for creative  development,  product  endorsement and market  research,
 $2.6 million in  compensation  and  benefits,  $923,000 in  professional  fees,
 insurance  and taxes,  $1.2  million in other  expenses,  $445,000  in facility
 costs,   $285,000  in  travel  expenses  and  $584,000  in   depreciation   and
 amortization. The Company has no direct marketing expense in the second quarter
 of 2003, as direct marketing expenses are now paid by the distributor.

         Selling, general and administrative expenses for the three month period
ended June 30, 2002 were  approximately $9.0 million or 16.8% of total operating
expenses,  $1.2  million of which was  related  to the  Company's  PBM  services
segment,  $6.9 million of which related to the  management  of the  supplemental
benefits segment,  while the remaining  $869,000 related to corporate  overhead.
These expenses  included  approximately  $1.1 million for creative  development,
product endorsements and market research, $4.3 million in direct marketing, $1.7
million in compensation and benefits,  $849,000 in professional fees,  insurance
and taxes, $376,000 in facility costs, $196,000 in travel expenses, and $426,000
in depreciation and amortization.

         INTEREST EXPENSE,  NET.  Interest  expense,  net for the second quarter
 2003, was approximately $114,000, compared to approximately $59,700 of interest
 expense  net for  the  three  month  period  ended  June  30,  2002.  This  was
 principally due to increased  borrowings under the line of credit in the fourth
 quarter 2002. Interest expense on borrowings for the second quarter of 2003 was
 approximately $161,000.

         PROVISION  FOR INCOME  TAXES.  Through the third  quarter of 2002,  the
 Company  maintained a full valuation  allowance against the Company's  deferred
 tax assets due to the uncertainty as to their ultimate realization.  Due to the
 recording of the full  valuation  allowance,  no provision for income taxes was
 recorded in the second  quarter of 2002. As the Company  released its valuation
 allowance in the fourth  quarter of 2002,  the Company,  using an effective tax
 rate of 38.6%,  recorded a provision  for income  taxes of $1.4  million in the
 second quarter of 2003.  See Note 9 to these Notes To Financial  Statements for
 further information.

         NET INCOME.  Net income for the three month  period ended June 30, 2003
 was $2.2 million compared to $1.5 million for the three month period ended June
 30, 2002.  The $2.2 net income for the second  quarter of 2003  included a $1.4
 million provision for income taxes as discussed above. As a percentage revenue,
 pre-tax net income increased from 2.8% to 3.9%.

SIX MONTHS ENDED JUNE 30, 2003, COMPARED TO SIX MONTHS ENDED JUNE 30, 2002

         REVENUE. Revenue from operations for the six months ended June 30, 2003
 was $185.8 million, consisting of $158.9 million in revenue associated with the
 PBM  segment  and $26.9  million in revenue  attributable  to the  supplemental
 benefits  segment.  PBM segment revenue  increased by $86.8 million,  including
 $53.1  million  from PNNC,  while the  supplemental  benefits  segment  revenue
 decreased by $10.9 million. Revenue for the first six months of 2002 was $109.9
 million   consisting   of   approximately   $72.1  million  and  $37.8  million
 attributable to the PBM and the supplemental benefits segments, respectively.

                                       12
<PAGE>

         DIRECT EXPENSES. Direct expenses for the six months ended June 30, 2003
were $166.3 million,  consisting of $146.1 million in direct expenses associated
with the PBM  segment  and $20.2  million  in direct  expenses  attributable  to
supplemental  benefits segment.  PBM segment direct expenses  increased by $79.0
million,  including  $49.4 million from PNNC,  while the  supplemental  benefits
segment direct expenses decreased by $2.0 million. Direct expenses for the first
six months of 2002 were $89.3 million consisting of approximately  $67.1 million
and $22.2 million  attributable to the PBM and supplemental  benefits  segments,
respectively.  The direct  expenses of $166.3  million and $89.3 million for the
six month periods ended June 30, 2003, and June 30, 2002,  represented 93.0% and
82.9% of operating expenses for the respective periods.

         SELLING,    GENERAL   AND   ADMINISTRATIVE.    Selling,   general   and
administrative  expenses for the six month  period ended June 30, 2003,  totaled
$12.6 million or 7.0% of operating  expenses,  $7.6 million of which was related
to the Company's PBM services segment,  $2.0 million of which was related to the
management  of the  supplemental  benefits  segment,  while the  remaining  $3.0
million  related to corporate  overhead.  These expenses  include  approximately
$893,000 for creative development, product endorsement and market research, $5.2
million  in  compensation  and  benefits,  $1.7  million in  professional  fees,
insurance and taxes, $2.2 million in other expenses, $850,000 in facility costs,
$545,000 in travel expenses and $1.2 million in depreciation  and  amortization.
The Company has no direct  marketing  expense in the second  quarter of 2003, as
direct marketing expenses are now paid by the distributor.

         Selling,  general and administrative  expenses for the six month period
ended June 30, 2002 were approximately $18.4 million or 17.1% of total operating
expenses,  $3.1  million of which was  related  to the  Company's  PBM  services
segment,  $13.5 million of which related to the  management of the  supplemental
benefits segment, while the remaining $1.8 related to corporate overhead.  These
expenses included  approximately $2.5 million for creative development,  product
endorsements and market research, $8.4 million in direct marketing, $3.8 million
in compensation and benefits,  $1.8 million in professional fees,  insurance and
taxes, $757,000 in facility costs, $319,000 in travel expenses,  and $850,000 in
depreciation and  amortization.

         INTEREST EXPENSE,  NET. Interest expense,  net for the six month period
 ended June 30,  2003 was  approximately  $263,000,  compared  to  approximately
 $3,600 of interest  expense,  net for the six month period ended June 30, 2002.
 This was  principally due to increased  borrowings  under the line of credit in
 the fourth  quarter  2002.  Interest  expense on  borrowings  for the six month
 period ended June 30, 2003 was approximately $345,000.

         PROVISION  FOR INCOME  TAXES.  Through the third  quarter of 2002,  the
 Company  maintained a full valuation  allowance against the Company's  deferred
 tax assets due to the uncertainty as to their ultimate realization.  Due to the
 recording of the full  valuation  allowance,  no provision for income taxes was
 recorded  for six months  ended June 30,  2002.  As the  Company  released  its
 valuation  allowance  in the fourth  quarter  of 2002,  the  Company,  using an
 effective  tax rate of 38.6%,  recorded a  provision  for income  taxes of $2.6
 million in the first six months of 2003. See Note 9 to these Notes to Financial
 Statements for further information.

         MINORITY  INTEREST.  There was no minority  interest charge for the six
month period ended June 30, 2003, while the Company recorded a minority interest
charge of  approximately  $45,000 for the six month  period ended June 30, 2002.
The $45,000 change  represents the net income  attributable  to the 20% minority
interest  holder of Catalyst for the months of January and February 2002, as the
Company purchased the remaining minority interest on March 1, 2002.

         NET INCOME.  Net income for the six month  period  ended June 30, 2003,
was $4.1  million  compared to $2.1  million for the six month period ended June
30, 2002.  The $4.1 net income for the six months ended June 30, 2003 included a
$2.6 million  provision  for income taxes as  discussed  above.  As a percentage
revenue, pre-tax net income increased from 1.9% to 3.6%.

                                       13
<PAGE>




LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

         Cash and cash  equivalents  at June 30,  2003,  totaled  $26.2  million
compared to $24.3  million at June 30,  2002.  During the six month period ended
June 30,  2003,  the  Company  generated  $13.7  million in cash from  operating
activities, paid approximately $118,000 in cash for capital expenditures, repaid
approximately  $1.1  million  in  cash  to  satisfy  the  Catalyst   acquisition
promissory  note  and  repaid  $4.0  million  in  cash on the  revolving  credit
facility.

         NET CASH  PROVIDED  BY  OPERATING  ACTIVITIES.  The  Company's  overall
operating  activities generated $13.7 million of net cash from operations during
the first six months of 2003, a $20.1 million  increase from the $6.5 million of
net cash  utilized in the six month period ended June 30, 2002.  The increase is
primarily  due to a $4.6 million  increase in income before income taxes and the
timing of payments to vendors included in accounts  payable,  offset somewhat by
the timing of payments from clients included in accounts receivable

         NET CASH  USED IN  INVESTING  ACTIVITIES.  Net Cash  used in  investing
activities for the six months ended June 30, 2003, was $1.2 million  compared to
$10.3  million for the six months ended June 30, 2002.  The decrease is due to a
reduction in capital  expenditures  and repayments  due on the  promissory  note
regarding the Catalyst  acquisition in 2002. As of March 1, 2003, the promissory
note on the Catalyst acquisition was satisfied.

         NET  CASH  FROM  FINANCING  ACTIVITIES.  Net  Cash  used  in  financing
activities  for the first six months of 2003 was $3.9  million  compared to cash
provided  by  financing  activities  of $8.0  million in the first six months of
2002. In 2003, the Company made payments  totaling $4.0 million on the Company's
outstanding revolving credit facility; while in 2002, the Company arranged for a
line  of  credit  with a  financial  institution,  of  which  $8.0  million  was
outstanding at June 30, 2003.

         The Company anticipates  continuing to generate positive operating cash
flow, which combined with available cash resources, should be sufficient to meet
our planned  working  capital,  capital  expenditures  and  operating  expenses.
However,  there can be no assurance that we will not require additional capital.
Even if such  funds  are not  required,  we may seek  additional  equity or debt
financing.  We cannot  be  assured  that such  financing  will be  available  on
acceptable  terms, if at all, or that such financing will not be dilutive to our
stockholders.

                                       14
<PAGE>



ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
------   ----------------------------------------------------------
         (Included in Management's Discussion and Analysis of Financial
          Condition and Results of Operations)

ITEM 4.  CONTROLS AND PROCEDURES
-------  -----------------------

         GENERAL STATEMENT OF  RESPONSIBILITY.  The management of the Company is
responsible for the  preparation,  integrity and objectivity of the Consolidated
Financial  Statements  and the other  information  included in this report.  The
financial statements have been prepared in conformity with accounting principles
generally  accepted  in the United  States of America  and  accordingly  include
certain amounts that represent management's best estimates and judgments. Actual
amounts could differ from those estimates. Management maintains internal control
systems to assist it in fulfilling its responsibility  for financial  reporting.
These  systems  include   business,   accounting  and  reporting   policies  and
procedures,  selection of personnel, and segregation of duties.. While no system
can ensure elimination of all errors and irregularities,  the Company's systems,
which are reviewed and  modified in response to changing  conditions,  have been
designed to provide reasonable  assurance that assets are safeguarded,  policies
and procedures are followed, transactions are properly executed and reported and
appropriate  disclosures are made. The concept of reasonable  assurance is based
on the  recognition  that  there are  limitations  in all  systems  of  internal
controls and that the costs of such systems should not exceed their benefits.

         EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.  As of June 30, 2003,
the Company  evaluated  the  effectiveness  of the design and  operations of its
disclosure  controls and procedures pursuant to Rule 13a-15 under the Securities
Exchange  Act  of  1934,  as  amended  (the  "Exchange  Act").  Based  upon  the
evaluation,  the Company's Chief Executive  Officer and Chief Financial  Officer
concluded that the Company's disclosure controls and procedures are effective in
ensuring that  information  required to be disclosed in the  Company's  periodic
filings under the Exchange Act is accumulated and  communicated to such officers
to allow timely decisions regarding required disclosures. There was no change in
the  Company's  internal  control  over  financial  reporting  during the second
quarter  of 2003  that has  materially  affected,  or is  reasonably  likely  to
materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS
------   -----------------

         In the ordinary  course of business,  the Company may become subject to
legal proceedings and claims.  The Company is not aware of any legal proceedings
or claims which,  in the opinion of management,  will have a material  effect on
the financial condition or results of operations of the Company.

ITEM 2   CHANGES IN SECURITIES
------   ---------------------

         None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
-------  -------------------------------

         None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------  ---------------------------------------------------

         None

ITEM 5.  OTHER INFORMATION
-------  -----------------

         None

                                       15
<PAGE>



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
------   --------------------------------

1.   The following exhibits are filed as part of this report unless noted
     otherwise:

<TABLE>
<CAPTION>

     Exhibit No.                                   Description
     --------------------------------------------------------------------------

     <S>            <C>                                                        <C>  <C>
          3.1(a)    Certificate of Incorporation of HealthExtras, Inc( 1) 3.1(b)
                    Form of Amended and Restated Certificate of Incorporation
                    (1)
         3.2        Bylaws of HealthExtras, Inc. (1)
         4.1        Specimen Stock Certificate of HealthExtras, Inc. ( 1)
         4.2        Form of Stockholders' Agreement (1)
        11.1        Computation of Per Share Earnings (Incorporated by reference
                    in Part I, hereto)
        31.0        Certifications pursuant to Rule 13a-14(a)/15d-14(a)
        32.0        Certifications pursuant to 18 U.S.C. Section 1350, as Added
                    By  Section 906 of the Sarbanes Oxley Act of 2002.
</TABLE>

--------------
(1)  Incorporated herein by reference into this document from the Exhibits to
     the Form S-1 Registration Statement, as amended, Registration No.
     333-83761, initially filed on July 26, 1999. .

2.   Reports on Form 8-K

         On April 30,  2003 the Company  furnished a Current  Report on Form 8-K
announcing the Company's financial results for the quarter ended March 31, 2003.


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<PAGE>


                                   SIGNATURES

    Pursuant  to the  requirements  of  Sections  13 or 15(d) 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.


                               HealthExtras, Inc.




Date:  August 14, 2003          By:  /s/ David T. Blair
                                     -------------------------------
                                     David T. Blair
                                     Chief Executive Officer and Director


Date:  August 14, 2003         By:  /s/ Michael P. Donovan
                                    -------------------------------
                                    Michael P. Donovan
                                    Chief Financial Officer and
                                    Chief Accounting Officer



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