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Strength in numbers: Group health for your small business

When it comes to buying a group health insurance plan, small businesses can be at a real disadvantage. Just as you'll get a better deal if you buy a case of cat food at a warehouse outlet like Sam's Club, you'll enjoy lower group health insurance premiums if you're paying for more employees.

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Many small businesses have banded together to form group purchasing pools in order to attain better bargaining power. Although these pools are typically centered around metropolitan areas, some statewide pools exist as well, most notably in California, Connecticut, and Texas. It's very difficult to characterize the pools. Some are state agencies, some are private nonprofits, and some are a mix of both. Some purchasing pools even aim to make a profit, although they're closely watched by regulators. Some offer a few different choices of health plans while others offer only one.

Local connections

If you're looking for a group purchasing pool near you, your local Chamber of Commerce is the best place to start. Many serve as group purchasing alliances themselves. If your chamber doesn't, it should be able to point you in the direction of a regional or statewide alliance near you.

If you have no luck with the Chamber of Commerce, your state's insurance department should be your next stop. Insurance is regulated at the state level, so they should be aware of any groups in the state that help employers buy it. Insurance department telephone numbers can be found by choosing your state from the pull-down menu located in the navigation bar at the top of this page. Certain trade organizations may also be able to get better deals for their members.

The National Federation of Independent Business (NFIB), a nationwide lobbying group for small businesses, recently started offering group health insurance in selected states. That telephone number is (202) 554-9000.

Group health purchasing pools listed by state

This list, compiled by the Institute for Health Policy Solutions, is current as of September 2003. It focuses on groups that offer recipients a choice of health plans. If you don't see your state or region here, check with your local Chamber of Commerce or your state insurance department to see if there is a group health insurance purchasing alliance. (To find insurance department contact information, choose your state from the menu near the top of this page.)

State Plan Size of Firm Region Phone Number
California Pacific Health Advantage 2-50 employees, or employers of any size if they obtain coverage through a qualifying trade association. Statewide (949) 766-1905
Colorado The Alliance Any size Statewide (800) 996-CHIP or
(303) 316-6767
Connecticut CBIA Health Connections 3-50 employees Statewide (860) 244-1900
Florida Florida Community Health Purchasing Alliance 1-50 employees Statewide (800) 469-2472
Kansas Alliance Employee Health Access Inc. 2-50 employees Statewide (785) 266-1970
Michigan Detroit Regional Chamber of Commerce 1-99 Must be located in McComb, Oakland, or Wayne counties. (313) 964-4000
Montana Community Health Options 2 or more employees Statewide (406) 721-6275
New York LIA Health Alliance 2-50 employees Long Island plus Brooklyn, Queens, Nassau, and Suffolk Counties (516) 493-3007
New York Health Pass 2-50 employees Five boroughs of New York City (212) 252-9010
North Carolina Caroliance Fewer than 50 employees Statewide (800) 873-6464
Ohio Council of Smaller Enterprises (COSE) 1-250 employees Northeast Ohio (888) 304-4769 or (216) 621-3300
Oregon Associated Oregon Industries 2-50 employees Statewide (503) 588-0050
Texas Texas Health Care Purchasing Alliance 2-50 employees Statewide (800) 842-7289
Utah Care of Utah 2-50 Statewide (801) 463-9220
Washington HealthChoice 3 or more employees Statewide (800) 521-9325 or
(360) 943-1600

Source: Institute for Health Policy Solutions

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