Health Savings Accounts and small group pools remain the top ways to reduce costs for the nation's smallest employers, says the National Association of the Self Employed. "It looks pretty bleak," said Christie Darrien, executive director of the association, which represents 250,000 member businesses nationwide. "But there are things that small business owners and the self-employed can do. It's very important that micro-business owners in particular have health insurance. A single medical emergency can bankrupt their business." There are more than 18 million micro-businesses — companies with 10 or fewer employees — in the United States, the NASE says. Those businesses cite cost as the single most significant barrier to offering health care coverage to employees. Less than 13 percent of those companies offer health insurance, she said. "It's the top issue that micro-businesses face," Darrien said. "Health coverage costs have increased over the past five years and it's become a larger focus for us. We're trying to educate, assist with options." But those options are limited, she admits.

The association is working with policy makers to increase options for the smallest businesses and for the self-employed. "Right now, they have two choices – individual coverage such as an HSA or small group coverage," she said. "In many states, there's a lack of competition, some only have one insurance provider for small group coverage." In Colorado, the number of small employer groups covered by health insurance has steadily dropped during the past five years, according to the Colorado Division of Insurance. Carriers operating in the market reported 46,368 groups, a 5.4 percent decrease – which represents a loss of 15,066 individuals without small group coverage. "The decline in the small group market corresponds to increasing insurance costs," said Commissioner David Rivera. "While we should be concerned about the continuing decrease in the small group market's size, the rapid proliferation of more affordable HSA (health saving accounts) products should provide more optimism." The survey shows that more than 26,000 people in Colorado are covered by HSAs, up from 1,075 in 2004. That option is one that NASE continues to educate its members, said Darrien. "We have an online presence, as well as a booklet, that discusses the tax options available to small businesses that use the health savings accounts," she said. "We explain what the insurance is, and the tax options to keep the costs down." The association encourages members to contact their state's department of insurance to discover the state-sponsored insurance options. In Colorado, carriers are required to issue small group products to employers regardless of the health status of employees. Colorado is also one of a few states that offer limited guaranteed health insurance to the self-employed, Rivera said. NASE attempts to do much of the background work and research on finding affordable health insurance for its members, Darrien said. NASE created microbusinesshealth.com as a resource for employers. "We suggest they look at the options inside the state," she said. "They need to be familiar with their local chamber and other professional organizations that might offer discount health options. Some states allow the self-employed to use the state health insurance program. States are really getting creative as health insurance costs rise." NASE is also getting creative. One way to lower health care costs, Darrien said, is to increase wellness. The association encourages healthy habits for employers and employees. "Overall, it's very important to find coverage to protect themselves – even if it's just minimum catastrophic coverage," she said. "But we also have a page of tips on how to stay healthy – even if we just encourage talking a walk — and to encourage employees to stay healthy." NASE also lobbies Congress, attempting to persuade legislators to pass bills that will assist in lower costs for micro-businesses and the self-employed. Transparency is an issue as well, she said. "We never know what it costs," she said. "And these are people who are used to running their own business – they know what everything costs. So if they want to shop around for different doctors' prices; they really can't. If they need a test, like an MRI, and they want to know how much it costs to compare prices; they can't find out. It's difficult to be a smart healthcare consumer without that transparency."