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Untitled Document

HEALTHAXIS,
INC.
7301 North State Highway 161, Suite 300
 Irving, TX 75039

August 11,
2005

Barbara C.
Jacobs
 Assistant Director
Securities and Exchange Commission
Division of Corporate
Finance
Washington, D.C.  20549

Re:

 Healthaxis
Inc.
Registration Statement on Form S-3
Filed June 27, 2005
File No. 333-126146

Dear Ms. Jacobs:

     Set
forth below are the responses of Healthaxis Inc. (the “Company”) to
the Commission’s comment letter dated July 28, 2005.

     For
your  convenience,  the  Commission’s  comments  have  been  repeated  herein,  with
the  Company’s  response  immediately  following each of the  Commission’s
comments and  highlighted in bold font.

     Because
only a few of the Staff’s comments would require changes to the Registration
Statement on Form S-3 (the “Registration Statement”), we have included
herein our proposed modifications to the Registration Statement as appropriate,
and otherwise provided the responses requested.

Form S-3

General

1.

 We
note  that  this  registration  statement  covers  3,333,333  shares of common  stock
underlying  a warrant  issued to Tak  Investments,  Inc.  We  further  note that  this
warrant  allows Tak  Investments  to  exercise  the  warrant  for  up  to  2,222,222
shares,  but  allows  Healthaxis  the  right  to  call  the  exercise  of  this  warrant
for  up  to  3,333,333  shares  under  certain  conditions.  Considering  that  Tak
Investments  has the  right to  appoint up to three  designees  to the board of
Healthaxis  and the board  (including  the Tak Investment  designee(s))  must unanimously
agree to call the exercise  of the warrant,  it appears that Tak  Investment  retains
some  amount  of  investment  control  regarding  the  compelled exercise of this
warrant.  Accordingly,  please  provide us with an analysis of why the shares  underlying
this warrant are eligible for  registration at this time,  given the apparent  investment
decision  that remains in  the hands of Tak  Investments  through its  designees  on
your board.

As disclosed in
the Registration Statement, on May 13, 2005, pursuant to a Stock and Warrant
Purchase Agreement, Tak Investments, Inc. (“Tak Investments”) purchased
from the Company certain shares of the Company’s common stock and three
warrants (the “Warrants”) exercisable for additional shares of common
stock (the “Private Placement”). As further disclosed in the Registration
Statement, and as the Staff correctly points out, the first Warrant contains a
provision permitting the Company to call the exercise of the Warrant under certain
conditions, which include the unanimous approval of such action by the Company’s
Board of Directors (including the approval of Tak Investments’ designees to
the Board). While the Company fully expects that Tak Investments’ designees
to the Board of Directors will exercise their fiduciary duties on behalf of all of
the Company’s shareholders when determining whether to call the exercise of the
first Warrant, the Company acknowledges that Tak Investments does retain a degree of
control over whether the first Warrant is called for exercise. Putting aside
this call feature in the first Warrant, the first Warrant, and also the second and
third Warrants, are otherwise like most other warrants, which leave the decision
to exercise the warrants to the discretion of the holder of the warrants.
Each of the Warrants provides for a fixed exercise price and permits Tak
Investments, the holder of the Warrants, to exercise the Warrants for as many or as
few of the shares of common stock covered by the Warrants as Tak Investments desires.

The Company
believes that it is a common, accepted practice to register for resale the
securities underlying warrants following the completion of the sale of the
warrants in a private offering, but prior to the time that the warrants are
exercised for the underlying securities. This practice is supported by the Staff’s
rulemaking efforts and no-action positions. Most fundamentally, the Staff’s
no-action letter issued in Black Box Incorporated (June 1990) and in other
no-action letters stated that in relying on Rule 152 under the Securities Act,
“the filing of a registration statement subsequent to an offering otherwise
exempt from registration under Section 4(2) of the Act does not vitiate the exemption
provided by the Section 4(2) private offering exemption.” In the context of
warrants issued in a private offering, proposed Rule 152 included in the
so-called “Aircraft Carrier Release” (SEC Release 33-7606 (1998)) states
that when the private offering includes warrants, the “offering of securities
underlying convertible securities or warrants will be considered completed if the
offering of the convertible securities or warrants to which it relates is
completed.” See Proposed Rule 152(a)(3); see also Quad City Holdings, Inc.
(Apr. 8, 1993) and The Equitable Life Assurance Society of the United States (Feb.
18, 1992)) for examples where in the context of the filing of a registration
statement subsequent to a private offering that included warrants the Staff did not
object to the view that the investment decision relating to the warrants and
underlying securities was made at the time of the closing of the private offering.

The Company
believes that the treatment of the Warrants sold to Tak Investments in the Private
Placement should be treated consistent with the Staff’s treatment of warrants
in this context. The Company believes that the essential investment decision
relating to the Warrants purchased by Tak Investments was made at the time of the
closing of the Private Placement and is inseparable from Tak Investments’ decision
at that time to purchase the associated shares of

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common stock of the Company. Tak Investments
made a $5 million investment in the Company through the Private Placement and, as
part of that investment decision, negotiated the purchase of three Warrants having
specific terms. The value of the Warrants purchased by Tak Investments will be realized
by Tak Investments if the Company’s common stock price rises above the exercise
prices fixed in the Warrants. In the event that the Company’s common stock price
rises above the exercise prices stipulated in the Warrants, then it is likely that Tak
Investments will elect to exercise the Warrants and, under the proposed terms of the
Registration Statement, proceed to resell the underlying shares of common stock in the
market in order to liquidate the value associated with the Warrants. The investment
decision relating to the Warrants was made by Tak Investments at the time of the Private
Placement, when as part of its decision to invest in the Company it negotiated the
exercise price for each of the Warrants, the number of shares of common stock covered
thereby, the period of time during which the Warrants could be exercised and certain
cashless exercise features. Tak Investments’ remaining decision is largely one of
timing, hinging significantly on the performance of the Company’s common stock
price.

2.

 We
also  note  that  this  registration  statement  includes  2,777,777 shares  underlying
the two additional  warrants  issued  to Tak  Investments,  Inc.  on May  13,  2005.  It
appears  from  exhibits  10.3  and 10.4 to the  Form 8-K filed May 17, 2005,  that the
maximum  number of  shares that may be  purchased  upon the exercise of these  warrants
is,  in part,  contingent  upon the  number  of  shares  purchased  from the exercise of
warrant  2005-01,  which  is  described  in the  comment  above.  Since  the  number of
shares Tak  Investments is eligible to purchase  under these  warrants is contingent
upon its  investment  decisions  with  respect to warrant  2005-01,  it appears  that the
1,666,665 shares  underlying the contingent part  of these  warrants are not eligible for
registration  at  this  time  because  Tak  Investments  has  a  subsequent  investment
decision  to make before the number of shares  eligible  for  purchase  upon  the
exercise  of  these  warrants is determined.  Please revise your  registration  statement
accordingly  or provide us with an analysis of  why the  1,666,665  additional  shares
may be included in  the registration statement.

As noted by the
Staff, the Registration Statement includes 2,777,778 shares underlying the second
and third Warrants sold to Tak Investments in the Private Placement. In the
aggregate, these Warrants may be exercised for at least 1,111,112 shares of
common stock and, depending upon the number of shares exercised by Tak
Investments under the first Warrant, up to an additional 1,666,666 shares. At the
time of the Private Placement, Tak Investments negotiated the terms of these
Warrants to permit the exercise for a minimum number of shares of common stock
with a variable ceiling. The Company respectfully submits that, as noted in its
response to Comment #1 above, that the fundamental investment decision made
with respect to these Warrants was made by Tak Investments at the time of the
Private Placement. Further, while the maximum number of shares for which the second
and third warrants are exercisable cannot yet be determined, these Warrants are no
different than most other warrants in the sense that the warrant holder decides in
its own discretion whether to exercise all or some portion of the shares
covered by the warrants. This decision is usually driven by the warrant holder’s
judgment as to the anticipated future relationship between the company’s
stock price and the exercise price set forth in the warrant.

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3.

 As
a  follow-up  to the two  comments  above,  please  provide us with a detailed  analysis
as to whether  your  offer of warrants to Tak  Investments was completed prior  to the
filing of this  registration  statement.  In this  regard,  we note that all three
warrants are  exercisable  for amounts of shares  that have not yet been  determined  and
are contingent on future investment  decisions by Tak  Investments.

Per the
analysis set forth in the Company’s responses to Comments #1 and #2 above,
the Company believes that its sale of shares of common stock and Warrants to Tak
Investments was completed at the time of the closing of the Private Placement
and prior to the filing of the Registration Statement. The Company repeats
its references to the Aircraft Carrier Release and the no-action letters cited in
response to Comment #1 in support of its view that the offering of the shares
of common stock underlying the Warrants was also complete at the time of the
closing of the Private Placement.

Front Cover

4.

 We
note from your risk  factor  disclosure  on page 8  that  you  currently  have  effective
registration  statements  for  the  registration  of  the  resale  of a  substantial
number  of  shares  of  your  common  stock.  Please  include  a brief  description  of
all  concurrent  public  offerings in the prospectus and expand your front  cover page to
disclose the existence of these  concurrent  offerings  and to indicate  the number of
shares  covered  by the other registration statements.

We propose
adding disclosure to the cover of the prospectus in response to the comment
regarding the number of shares registered pursuant to one effective registration
statement and three registration statements registering the resale of shares
issuable pursuant to stock options under employee benefit plans. We propose
adding similar disclosure to the risk factor on page 8 in response to the comment.

Selling
Shareholders, page 11

5.

 Please
expand the filing to  describe  the  material  transactions  and  relationships  between
Healthaxis and  each of the  selling  shareholders  during the past three  years.  See
Item  507  of  Regulation  S-K.  The  transactions  whereby the shares to be resold were
issued  should  be  described  in  materially  complete  terms.  Please  revise to
disclose  the basic  terms of all such  issuance  transactions,  including  the  dates
the  transactions  took  place,  the  material  terms  of  the  transactions,  the
parties  who  participated  in  the  transactions  and  the  number  of  shares  or
warrants  received  by  them.  For  example,  while  we  note  the  disclosure you have
provided in your prospectus  summary,  in  this  section  you  do  not  appear  to
provide  a  meaningful  description  of the  terms  of  the  warrants  issued  to Tak
Investments  or the  warrants  issued  to  Triple Tree, LLC.  Additionally,  your current
disclosure  provides  no  information  regarding  the  value  of  the  services  provided
in exchange for the  warrants  granted  to  TripleTree.  Ensure  that  your  next
amendment  is  revised to provide all of the information noted above.

We propose
replacing the disclosure under “Recent Developments” with the disclosure
attached hereto as Exhibit A, and adding the disclosure under Exhibit B to the
disclosure following the selling securityholders table. You will note that this
revised disclosure is largely drawn from the Company’s definitive proxy
statement dated March 30, 2005 pursuant to which the Company’s common
shareholders approved the transactions with Tak Investments.

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6.

 Please
confirm  that  none  of  the  selling  shareholders is an affiliate of a broker-dealer.

We hereby
confirm that neither Sharad Tak nor Tak Investments is an affiliate of a
broker-dealer. We hereby confirm that each of Kevin Green, David Henderson and Scott
Tudor are an affiliate of a broker-dealer. Please be advised that these latter
individuals acquired the shares offered in the ordinary course of business, and at
the time of the acquisition of the securities, did not have any agreements or
understandings, directly or indirectly, with any person to distribute the
securities. We propose adding a footnote (4) next to each of their names in the
selling securityholders table and adding the following as the text of such footnote:

(4) Each of
these individuals is an affiliate of a broker-dealer, acquired the shares
offered hereby in the ordinary course of business, and at the time of the
acquisition of the securities, did not have any agreements or understanding,
directly or indirectly, with any person to distribute the securities.

Plan of
distribution, page 12

7.

 You
indicate  that selling  shareholders  may create  short  positions in the offered
securities in connection  with  the  offering.  In  your  response  letter,  please
advise us that  Healthaxis  and the selling  shareholders  are aware of CF Tel. Interp.
A.65.

The Company
supplementally advises the Staff that Healthaxis and the selling shareholders are aware
of CF Tel Interp. A.65.

8.

Tell
us what steps you have implemented to ensure that each of the selling shareholders
will conduct the distribution in accordance with Regulation M. See paragraph
(b)(7) of Rule 461 of Regulation C. In this regard, we note your disclosure that
the anti-manipulation provisions of Regulation M may apply to the selling
shareholders’ sales in the market. Please revise your disclosure to state
clearly that the selling shareholders will be subject to the Exchange Act rules,
including Regulation M.

The Company
supplementally informs the Staff that each selling stockholder has indicated an
understanding of Regulation M and has provided a written undertaking to
conduct the distribution in compliance with Regulation M.

We will revise
the Form S-3 disclosure to state clearly that the selling shareholders will be
subject to the Exchange Act rules, including Regulation M.

Item 16.
Exhibits, page II-2

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9.

 All
agreements  memorializing  the  issuance  transactions  regarding  shares being
registered for  the  accounts of the selling  shareholders  should be  filed  as
exhibits  to the  registration  statement.  For  example,  while we note that you have
filed the  Stock and  Warrant  Purchase  Agreement  and  related  warrants  as  exhibits
t