"But Jim," you say to your top technician, "I'm just a small business person, and I can't afford to provide a health insurance plan." So you lose Jim. It doesn't have to be that way.

Health insurance is the second most common benefit requested by job applicants, the first being paid vacations. Less than 40% of all employers with less than 10 employees offer this benefit, the main reason belng the cost. But cost doesn't have to play a major role if you provide managed care programs with shared cost. Do it right, and Jim will join you; don't do it, and you lose quality employees to larger firms. Here's how to get started.

IDENTIFY NEEDS
Your first task is to ask your present employees what they would like to have in the way of health insurance. Be up-front with them about your ability to pay, but allow free rein to explore needed and wanted benefits. Make a list of the 'absolute must' benefits and another of the 'nice to have' features.

IDENTIFY PROVIDERS
Call around to see which of the insurance providers can offer programs for your size business. Don't neglect to contact your local Chamber of Commerce as many have made insurance alliances with one or more providers in your area. Do call the big guys, they're finally recognizing that 90% of all businesses in the US are small businesses; but at the same time, contact a few independent agents for their input. They may have affiliations with insurers not necessarily in the local phone book.

Select-out three to five providers and ask them to make a presentation to you. Be sure to tell them you want a complete explanation of their different coverage plans, provide quotes on their main and alternate plans, and ask how they will service your policy when issued.

MANAGED CARE FEATURES
These plans are very popular because they offer more benefits if you agree to use their designated doctors and hospitals. Health Maintenance Organizations (HMOs) are an example of this type of plan. They typically provide 100% reimbursement for most services, but provide little or no reimbursement if you want your 'own' doctor or want to go to 'your' hospital.

Preferred Provider Organizations (PPOs) usually offer somewhere around 90% reimbursement if you go to their doctor and hospital and 50 to 70 % if you go to your own. This allows some flexibility.

Whichever of these you select, be sure to ask what the reimbursement is for emergency care. Some plans drop coverage to 50% or less to discourage expensive use of emergency rooms.

INDEMNITY PLAN FEATURES
These plans are what we used to call 'health insurance' a few years back. They're still around, and many have been upgraded to today's standards. The main feature of these plans is the 80-20 program. You pay 20% of the cost of health care up to some figure, then the insurer pays 100% of all over that amount up to some set figure. Watch yourself on these, they often have a very low limit for what we would call 'common' health problems.

Some indemnity plans have a managed care feature, and most have a pre-admission review policy which means you have to get your insurer's permission to have your child's tonsils out.

SELF INSURANCE FEATURES
Forget it! You're going to have to be fairly large before this method can work for you. If you feel you might get a benefit out of this type of coverage, ask for information on claims administration from your list of providers.

WHAT YOU WANT TO KNOW
Request the following from each person presenting a plan.

1. Submit information on your reputation and financial strength. (You might want to do your own Internet search on the reputation part.)
2. When is renewal? (Remember, the company can up your rate at any policy anniversary. Get it in writing!)
3. What do you have to do to administer the program? (An 800 number where you can get information and have your questions answered on-the-spot is best. Having to go through a local agent means delays.)
4. How long does it take to pay claims, and to whom are the payments made? (History of payments is very important. Ask for this in writing !)
5. Will your plan be underwritten as a group plan or as a group of individual plans. (This may be important for portability.)

OTHER INFORMATION
You might consider asking your professional or trade association for information, they may have a plan you can buy into. Don't forget the Internet, use the public library, and ask your friends.