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Health insurance cheap?   To learn more about the accounts and to find MSA providers, check the website run by the Council for Affordable Health Insurance (www.cahi.org). Even if the bill doesn’t pass, MSA holders can continue their coverage as long as they qualify. Although the law authorizing MSAs is set to expire next year, supporters in Congress have introduced legislation to reauthorize them.

This could be a big plus for the employee or solo worker who uses few medical services over the years. The unused cash grows untaxed, and the employee can withdraw the balance tax-free at retirement. Of course, since the accounts must be replenished annually, cash in the trust account may grow to cover the gap. In the event of unexpectedly high medical expenses, the employee must dig into his own pocket to cover any gap between the insurance policy deductible and the amount in the savings account. But MSAs pose a financial risk.

(In comparison, deductibles on a traditional major-medical policy typically range from about $200 for singles to $1,000 for families.) No matter who funds the account, the money in it belongs to the employee. Not surprisingly, the second option has proved unpopular with some workers because deductibles for MSA insurance policies range from $1,550 to $2,300 for singles and $3,050 to $4,600 for families. If you have employees, you can put in the money or require them to cough up the cash. If you work by yourself, you’ll have to fund your own account.

However, up to 65% of the amount of the deductible (75% for families) must be deposited in a tax-deductible trust account to pay for medical services until the insurance kicks in. Medical savings accounts help self-employed individuals and business owners with fewer than 50 workers shave premium costs by 50% or more by purchasing coverage with a high deductible. Consider the pros and cons of medical savings accounts (MSAs). The website run by Georgetown University’s Institute for Health Care Research and Policy (www .georgetown.edu/research/ihcrp/hipaa) outlines protections for individuals and small businesses in each state.

Some state regulations, such as uniform premium rates, help keep down costs, but specifics vary according to your location. HIPAA doesn’t limit premium costs, but if you’re self-employed you can deduct 60% of the premiums on your federal income taxes without meeting the 7.5% adjusted gross income (AGI) threshold that applies to other medical expenses. Be sure to apply for coverage before your policy lapses, though, since HIPAA requires that you obtain health insurance within 63 days after your COBRA coverage expires. However, insurers can limit the number of choices they offer. HIPAA provides that individuals who have had group coverage for at least 18 months and aren’t eligible for other insurance, such as a spouse’s plan, can’t be denied insurance because of medical problems.

(For more details, see Health Benefits under COBRA, published by the Department of Labor and available on the Web at www.dol.gov/dol/pwba or by calling 800-998-7542.) Even when your COBRA coverage runs out, you can’t be refused health insurance, thanks to the federal Health Insurance Portability and Accountability Act of 1996. If you qualify for COBRA, your employer must notify you of your option to continue coverage, and you, in turn, must act within 60 days. For those over age 50 or with health problems, it’s likely a better value. You may experience sticker shock, especially if the plan is generous, but the group rate is likely to be lower than you’ll find on your own for the same coverage.

This law gives you the right to stay on your current plan so long as you pay the entire premium, plus a 2% administrative fee. As long as your employer has 20 workers or more, you’re covered by the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985. If you’re about to leave a job with health insurance to become self-employed, you can probably keep your current coverage for at least 18 months. SEE IF YOU’RE ELIGIBLE FOR COBRA.

To learn more about purchasing co-ops and to find out if there is one in your area, check the website run by the nonprofit Institute for Health Policy Solutions (www.ihps.org). Co-op rules require you to subsidize your employees, usually paying an amount equal to at least 50% of the lowest-priced plan. To join a co-op, you will have to pay a membership fee (generally $100 or less). However, explains Rick Curtis, president of the Institute for Health Policy Solutions in Washington, D.C., “the main attraction of these programs is not cost savings, but value and convenience.” Co-ops offer a menu of insurance plans with standardized benefits, making comparisons easy and allowing employers to provide their workers with a choice of options. Co-ops offer solid coverage at a decent price.

In general, purchasing co-ops serve businesses with two to 50 employees, though some admit sole practitioners or larger employers as well. JOIN A PURCHASING CO-OP. Finally, we’ve assessed a controversial small business insurance product that self-employed individuals and small business owners should approach with caution. The first one is targeted primarily to small firms; the second, to individuals launching a solo venture.

Here are two strategies that can make shopping for health insurance easier. Plus, where group purchasing is impossible, small employers find it impractical–and expensive–to offer a choice of health plans. And since coverage varies widely among plans, it’s almost impossible to comparison shop for the best value. For companies with more than 200 workers, premiums increased just 3.3% to an average of $462 for family coverage. The Kaiser study reports that premiums for firms with fewer than 10 workers jumped 8% in 1998, averaging $520 a month for family coverage.

One reason for the coverage gap may be that small businesses are often stuck with the highest prices. Roughly 65% of unincorporated solo workers and 81% of incorporated ones carry insurance, according to a 1999 study by the Kaiser Family Foundation. Self-employed individuals are somewhat more likely to buy coverage. That may be why the Employee Benefit Research Institute reports that only 54% of businesses with fewer than 200 employees offer health insurance. But for many small business owners and self-employed individuals, buying health insurance presents several hurdles.

Jost is fortunate enough to live in an area where small business owners have banded together to obtain some of the buying advantages of large employers. It’s good coverage and that gives my employees good feelings about their work,” he says. “I’m glad to do it. Jost picks up the entire cost.

The monthly premium for each employee ranges from $187 to $373, depending on the insurer, the type of plan and whether the employee needs individual or family coverage. Thanks to his membership in the Colorado Health Care Purchasing Alliance, Jost can give his small staff a choice of four insurers, each offering two health plans. “The best workers won’t settle for a job without these benefits,” insists Jost, president of American Data Group, a $1.3 million software-design firm in Denver.  To Mark Jost, it’s just good business sense to provide health insurance to his five employees.