Poor Health If you're waiting on the government or anyone else to do something about the rising costs of health benefits, face facts: If you want costs cut right, you have to cut them yourself.

When Kiersty Lombar was shopping for health insurance for theseven employees of her year-old online coffee and gourmet-foodscompany, she faced two challenges. "We had limited funding,yet we needed a competitive benefit package to recruitpeople," she recalls. Lombar, 27, worked with an onlineinsurance broker to find the right plan. She finally settled on aPreferred Provider Organization (PPO), a form of managed care thatoffers more freedom and a wider range of choices than thetraditional health maintenance organizations (HMOs).

Today, Lombar's company, The Perk.Com, offers generoushealth-care benefits. The Austin, Texas-based company pays 100percent of its employees' costs and 60 percent for spouses."It's important for us to take care of ouremployees," reasons Lombar. "We see this as a recruitingand retention tool. Even though we felt like we were at the mercyof the insurance companies, we decided it was something wecouldn't cut back on."

To offset the cost of health insurance, The Perk.Com keeps tightcontrol on salaries and other overhead. No fancy offices for thisInternet start-up. "We don't have a whole lot of beautifulfurniture in our offices," says Lombar. "Health coverageis more important to us."