THOUSAND OAKS -- Seeking to bring health insurance to small companies that would otherwise do without it, Blue Cross of California announced a new portfolio line on Tuesday. Double-digit hikes in health care costs for the past four years have prevented many small employers from covering their workers, with Blue Cross estimating that 38 percent of companies in the state lack coverage. Seeking to bring in industries that have traditionally not offered health benefits, such as the service and retail sectors, insurers have come up with low-cost plans specifically tailored to companies with fewer than 50 workers.

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The insurer's new portfolio, called BeneFits, differs from its other plans because it allows employers to pay only 25 percent of the premium or $50 per month, rather than 50 percent or $100 monthly. Additionally, only 60 percent of employees have to participate in the plan, rather than the standard 70 percent.

"Small companies are much less likely to offer insurance," said Marian Mulkey, a senior program officer for the California Health Care Foundation. "Far and away, the main reason is affordability and cost. For a long time, all the major plans have been looking at opportunities in this market, so anything that reduces the premium will get employers to take a second look."

With few large companies moving to California, plans must look increasingly to small employers to grow their business. Blue Shield of California added three PPO plans earlier this month, including a no-deductible plan and two high-deductible plans all aimed at small companies. Kaiser Permanente has more than doubled its offerings in the last two years, now offering 11 products for the market.

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