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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.

This story appears in the April 2000 issue of Entrepreneur. Subscribe »

When Kiersty Lombar was shopping for 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."

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