First Health Divests Preferred Works, Inc.

Contact:
Edward L. Wristen, President and CEO
or
Joseph E. Whitters, CFO
First Health
630-737-7511

FOR IMMEDIATE RELEASE

DOWNERS GROVE, IL - July 1, 2002- First Health Group Corp. (NASDAQ: FHCC) today announced that Sedgwick Claims Management Services Inc. (Sedgwick CMS) has signed a definitive agreement to acquire Preferred Works, Inc. (PW) based in Pasadena, California. PW offers a comprehensive array of integrated disability management services, stand-alone, non-occupational disability and claims management services and was previously part of CCN Managed Care, Inc. which First Health acquired in August, 2001. The transaction, valued at $4.15 million closed June 28.

First Health, the nation's premier full-service health benefits company, specializes in providing large employers with one integrated source for group health and workers' compensation. By combining pioneering technology with expert industry knowledge, First Health delivers comprehensive, cost-effective solutions for its clients nationally. For more information, visit the company web site at www.firsthealth.com

Sedgwick Claims Management Services, Inc. (Sedgwick CMS) is the leader in innovative claims and productivity management solutions. Sedgwick CMS provides cost-effective claims administration, managed care, program management and allied services to major employers through the expertise of 2,500 colleagues in more than 80 offices. Specialty areas include workers' compensation; employers, general and automobile liability; and short and long-term disability. Sedgwick CMS designs and implements custom programs that meet client needs. For more information visit www.sedgwickcms.com.

Certain statements herein regarding anticipated financial results and the Company's business and growth prospects are forward-looking statements that involve substantial risks and uncertainties. In accordance with the Private Securities Litigation Reform Act of 1995, factors that could cause the Company's actual results to differ materially from those expressed or implied by such forward-looking statements include, among others, the inability of the Company to continue to: (i) enter into contracts with and successfully implement programs for new clients within the time frame established by the Company and achieve the revenue growth expected to result from the addition of such clients, (ii) expand its group health, workers' compensation and public sector business, (iii) achieve the growth in the group health area that is anticipated as a result of the Company's strategy of focusing on larger, multi-sited national employers, (iv) control healthcare benefit expenses, (v) achieve operation and cost synergies anticipated as a result of the CCN acquisition, or (vi) add CCN's contracted providers to the First Health Medical Network on a timely basis. All forward-looking statements herein are made as of the date hereof and the Company undertakes no obligation to update such statements.