Q: I want to offer health insurance to my employees, but I'm worried about the cost. What are my options?

A: Offering health care benefits can be a powerful tool for employee retention, but you need to make sure you don't promise more than your company can afford to deliver. The good news is, there are several types of health plans small employers can use to offer a comprehensive benefits package at prices that won't bust their budgets.

Many states offer quality health plans at discounted rates to help business owners provide coverage to their workers and their workers' families, According to Alex Miller, president of Millennium Medical Solutions Corp., a Suffern, New York, employee benefits firm that works with small businesses in the New York City metropolitan area and Florida. For example, Healthy NY offers HMO and HSA plans sponsored by private insurance companies at 35 to 50 percent off regular prices. Plans like these generally carry premiums of less than $500 a month. And assuming your employees are willing to shoulder half the cost, this means that your company may be able to offer a comprehensive health plan for as little as $250 per employee.

The drawback to plans like these is HMOs typically restrict their coverage to doctors and hospitals that have joined their network and agreed to provide services at discounted rates. HMOs also require members to obtain referrals from their primary care physicians before they see specialists. HSA plans, often provided in conjunction with HMOs, typically carry large deductibles, which means your employees may have to pay as much as $2,850 in health care costs out of pocket each year before their insurance coverage kicks in. Employers can soften the blow by contributing pre-tax dollars to their employees' HSA accounts and receive tax benefits similar to those on contributions they make to their employees' 401(k) plans.