Offering a good health plan is a time-proven method of both attracting and retaining good workers. In addition, good health benefits also help keep your workers healthy, which increases productivity by reducing sick leave and staff turnover.

Unfortunately, fewer and fewer small businesses are offering health benefits to their employees now. According to the nonprofit Kaiser Family Foundation, in 2007 only 59 percent of firms with less than 200 employees provided health insurance. That's down from 68 percent in 2000, and much less than the 98 percent of large corporations that offer such benefits. The reason? As health care costs escalate, small business owners are finding it harder and harder to afford to provide insurance to their employees. Moreover, small business rates are typically higher than for larger companies. That's because big companies can spread the costs of a few employees' chronic and acute health issues across larger pools of workers. In the absence of large numbers, the premiums for small business health care packages are higher.

This isn't a minor problem. In a survey released in January 2009, credit card giant Discover reported that 33 percent of small business owners said that high health care costs were making it hard for them to grow their businesses. Two-thirds of the business owners surveyed said that obtaining affordable health care was either "very" or "somewhat" difficult. While the numbers are scary, health insurance is not an impossible dream. By doing research, carefully considering the options, and taking cost-saving measures, you can provide health insurance packages to your employees. And while the idea of universal health care, or at least some kind of health care reform, is currently active in this country, it will no doubt be years before it is implemented. That means the most prudent measure to take now is finding some kind of health benefit package for your employees.

Individual health plans are created for and purchased by individuals and their families. They generally require a detailed medical history and sometimes a medical exam to rule out any preexisting conditions. The plan's cost depends on the applicant's medical condition and lifestyle (e.g., smoking or not); applicants with serious medical problems may be denied coverage.

Group health insurance covers a number of individuals under one master policy, which is "owned" by an employer, a professional organization, a union, or other group. In most cases, no medical exam is required to take part in the insurance.

The cost of a group's policy is based on the group's demographics (including gender, age, health status, and number of dependents) and the nature of the group itself. In the case of a small business, for instance, the location and type of the business will affect the rates, with a tree-cutting service probably having to pay more than, say, a transcription service. But in general, group insurance is cheaper than individual insurance and the bigger the group, the lower the rate.

Don't rule out individual insurance entirely, however. Because the rates of health insurance for small businesses are rising so rapidly, individual workers may be able to get coverage at a cheaper rate than the group policy can provide. And with individual plans, your employees can choose for themselves the services they want.

Over the past few years, you may have heard of health savings accounts, or tax-exempt accounts that employees use for certain kinds of medical expenses. In some states, employees also can use their HSAs to save for retirement.

In order to have an HSA, you must have high-deductible health insurance plan. These plans cost less for the employer. But because the money for the deductible comes from the tax-exempt HSA (and both contributions and withdrawals are tax-free), your employees can still save money. The fact that employees can take the accounts with them if they change jobs is also attractive (for them, if not for you).

As an employer, you also can make tax-deductible contributions to your employees' HSAs, which can make the plan more attractive for your workers.

HSAs are regulated by the federal government, which each year sets a minimum deductible and maximum out-of-pocket cost for these plans.

Traditionally, owners of health care policies (e.g., a business owner or a professional group) have kept the cost of health care policies down by shifting part of the expense onto the enrollees. This can be done three ways:

You can also lower your rates if you (and your small business) join another group or "pool" of enrollees. That's because larger groups of enrollees tend to get lower rates for health insurance. Check with your local business association, alumni group, professional organization, or small business council to see if group policies exist or if other businesses would be interested in joining you.

Some small business owners reduce their costs by shifting more of the financial burden of the health care onto the employees, either by increasing the deductibles or reducing the coverage itself. Some businesses, for example, reduce or eliminate dental and vision insurance entirely. In a recent poll conducted by the National Federation of Independent Business, 72 percent of the respondents said they have limited employee health care options recently due to high costs. For more information on dental and vision care, see our Dental and Vision Insurance Buyer's Guide.

In recent years, both small and large businesses have started keeping the costs of their health plans down in various ways.

One of the most popular ways is to institute wellness programs at the job. At its most basic, this can include posting (or otherwise distributing) information on the benefits of exercise, nutrition, and other health topics. (Many health insurance companies provide such materials; if yours does not, you can find plenty of information on the Internet.) A wellness program might actually entail encouraging employees to adopt healthier lifestyles (i.e., by creating walking, running, or biking groups; subsidizing gym memberships; offering smoke-cessation programs; or providing incentives for pounds lost). Some large corporations go so far as to offer flu shots, cancer screenings, and 24/7 nurse hotlines to employees.

Such programs keep your short-term sick-day costs down. In the long run, they can keep down the cost of your health plan because employees are less likely to rack up health care service fees associated with heart disease, diabetes, high blood pressure, and obesity.

Agents and brokers generally get paid via commissions (which are rolled into the premium price) from the insurance company that the client chooses. Those who help you find insurance as part of a larger financial planning package, however, may charge you a direct fee for their work. While commissions or fees may seem like an unnecessary expense, remember that agents and brokers know how the world of health insurance works; they can research the price of different kinds of plans for your employees; they may be able to find discounts that lay people cannot; and they can educate you and your staff about how your particular plan works.

Alternatively, members of the NFIB can get free quotes for health insurance via eHealthInsurance, which partnered with NFIB in 2000.