Last January, the city of New York launched a two-year pilot project to help small businesses with two to 50 employees offer their staff members health insurance. The Small Business Health Insurance Program works as a purchasing alliance--it allows businesses to pool together, which makes them eligible for less expensive benefit plans from insurers. Program rates range from about $100 for individual employees to $235 for family coverage. New York City small-business owners can purchase the plan through their insurance broker, just like any other policy.
The program could be a win-win situation for both entrepreneurs and the city of New York. Entrepreneurs win with reduced premiums for their employees.The city wins, too, by reducing the financial burden of uninsured people using public hospital emergency rooms as walk-in clinics. But there are drawbacks, too: Employers who sign up must cover all their employees, and members of the plan can only use the services of three public hospitals, rather than choosing their own health-care providers. If the program succeeds, expect to see far more municipalities following the Big Apple's lead.