A small-business owner seeking health insurance for employees enters a dizzying maze of confusing regulations, numbing alternatives and -- at the end -- stunning prices.

"Good luck'' is the advice from Santiago Leon, an insurance broker with ACC Hall International in Miami.

Christina Kolbjornsen, who has just started a company, K+G Marketing and Public Relations, says "It has proven very difficult to identify and find a good insurance program."

Still, Leon and other experts say there are possibilities, including plans that offer lower premiums in exchange for higher deductibles and co-pays. There's also a growing phenomenon called professional employer organizations, a hybrid product that makes health coverage cheaper by bundling it with other services.

The first challenge is understanding the state regulations that control health plans for small businesses, defined as two to 50 employees. "The employer must pay at a minimum 50 percent of the employee premium," says Danny Saunders with Setnor Byer Insurance in Plantation, "and 75 percent of eligible employees must sign up for the plan."

Given those requirements, small groups get the benefit of being lumped together, within certain margins: Insurers can vary premium payments no more than 15 percent above or below the average charge based on similar groups with the same age and sex demographics in a given region.

If you have an older work force or younger women of child-bearing age, you're likely to pay more, but older women tend to be cheaper than older men. And businesses in South Florida, particularly Miami-Dade County, are likely to have considerably higher rates than those in North Florida, because healthcare tends to be considerably more expensive here and people often use more medical services than elsewhere.

As with so many other things, the key is that you get what you pay for. The cheaper the plan, the more the employee will be paying out of his or her own pocket.

One way to keep costs down is through a catastrophic plan, offered by Blue Cross Blue Shield of Florida and others in which hospital stays and outpatient surgeries are covered -- and nothing else.

Another possibility offered by several insurers provides coverage for visits to a primary care doctor, including annual physicals. For other services the plan pays 50 percent of the insurer's negotiated rate with the provider, with the employee paying the other 50 percent.

This negotiated rate is also a key to health savings accounts, in which the employee/employer can put money into a tax-free 401(k) type account for health costs, coupled with a high-deductible plan.

Leon warns that employees may be surprised to see how much they're paying out of pocket with HSAs, but Saunders says, "They can be better than nothing."

NEGOTIATED RATES

The key is negotiated rates: Let's say your doctor's gross charge for a typical office visit is $125 and the insurer has a negotiated a rate of, say, $50. With a high deductible plan, the employee would pay $50, not $125 -- a considerable savings by itself.

Each insurer has many variations on these basics. BCBS offers more than 30 plans for businesses in Florida. "There's almost too many choices," says Saunders.

One question that comes up frequently is why a group, such as a chamber of commerce, doesn't offer a plan for all its members. "This sounds like a good idea," says Leon. ‘‘The problem is something called adverse selection."

Join the discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. In order to post comments, you must be a registered user of MiamiHerald.com. Your username will show along with the comments you post. Thank you for taking the time to offer your thoughts.

     Showing: Oldest first Newest first Most-recommended first Least-recommended first

@Nyx.AuthorDisplayName@ wrote on @Nyx.PostedAtTime@:

@Nyx.repliedToText@

@Nyx.replyAnswerText@

Reply to this Comment @Nyx.Recommender@ @Nyx.AbuseReporter@