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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

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Lowest cost business health plan

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If you notice an error or are in doubt, please send a new question by email or ask for an update. Email

Q: I want to offer a low cost health plan to my employees. I do not want to pay the fee for an HRA. What are the other options?

A: The least expensive and most efficient small business health plan in terms of delivering valuable benefits that employees really want is a Health Reimbursement Arrangement (HRA). This can provide insured and uninsured health benefits. The lowest cost provider of these is Freedom Benefits Association at Although it is possible to run these health plans at an administrative cost of as little as $150 per year, most HRAs cost $150 per quarter due to required tax reporting. The employer determines the total cost of the plan simply by defining the benefit available to employees (for example, $100 per employee per month). The advantage is that a higher percentage of employee dollars goes directly toward benefits of the employees' choice. An alternate approach is to use a low cost insurance plan like ValueHealth at that provides limited health benefits that can often be offered for less than $50 per employee per month. Large employers in low wage industries are also moving toward these approaches; see the article "Trends in Large Employer Health Plans".


More resources:

ValueHealth limited benefit insurance plan