Reaching the uninsured: uncomplicated limited-benefit plans can provide basic, straightforward coverage to workers with low-to-moderate incomes.

According to new figures from the U.S. Census Bureau, the number of Americans without health insurance increased by 2.4 million last year to 43.6 million--the largest increase in a decade. While most Americans who have health insurance continue to get coverage through work (61%), it should come as no surprise that those with less education, lower incomes and part-time and seasonal work--as well as those who work for small companies--are far more likely to go without health insurance than the general population.

Within the past several years, a handful of insurance companies saw this growing need and began offering supplemental, noncatastrophic health plans--also known as mini-med of limited-benefit health plans--to employers of uninsured workers. These group plans have been around for years, but until recently they were exclusively used to bridge the coverage gaps left by major medical and catastrophic plans. However, escalating insurance costs led insurers and the marketplace to realize that these plans had additional utility as viable, stand-alone plans. It was also the first time that insurers found a way to underwrite health-care coverage for part-time and seasonal employees--a group that bad been previously ignored.

Although some health-care advocates, industry experts and even The Wall Street Journal have questioned the value of these limited-benefit plans, the policies are quickly becoming one of the fastest-growing health insurance offerings in the workplace. They now cover close to a million employees and their families through such major companies as Wal-Mart, McDonald's and Lowe's.

The question is, do limited-benefit health plans truly provide value for nonhighly compensated workers? It's important to remember that it's easy to be critical if you make $50,000 or $100,000 a year and can demand and pay for a major medical plan. But, if you're making $7.50 an hour, or even $10 or $12 an hour, a limited-benefit plan that gives you some access to basic medical and preventative care at an affordable cost is far better than nothing at all.

That being said, there are two things to consider when selling limited-benefit health plans. First, it's important that employers and employees aren't fooled into believing they're buying major medical or full coverage when, clearly, they're not. These plans are not designed to pay for major surgeries of long-term catastrophic illnesses, but they can allow a mother to take a child with a fever to the doctor or give her access to an annual breast exam, among other routine incidents.

Second, it's important to offer plans that tear down the barriers that keep low-income workers from using their benefits. For the working poor, that means making it affordable by providing first-dollar coverage, deleting deductibles or copays, and eliminating networks, medical underwriting and coordination of benefits. Companies that have done a good job of building plans that do these things, a fact that's apparent in their retention numbers, include Safeco Life & Investments (Select Benefits), Pan-American Life (Cash Plan) and American Fidelity (Gap Plan).

In a marketplace where health-care costs are rising at an average pace of 13% per year, limited-benefit plans have the additional advantage of being somewhat insulated from inflation. Hyper inflation within the health-care industry has priced many smaller employers out of major medical plans and literally driven business toward the limited-benefit plan arena.

For those who need and want to offer health coverage, limited-benefit plans are a viable option. Numerous studies have found that having access to health-care benefits, even limited plans, increases employee satisfaction and serves as a recruitment and retention tool. This is especially good news for employers who rely on seasonal, part-time and lower-income workers, for whom health-care benefits were simply not an option previously.

If you're looking to offer this kind of coverage to clients, avoid the "smoke-and-mirrors" plans. These are the plans that have deductibles and copays, medical underwriting, usual-and-customary clauses, pre-existing condition exclusions, network requirements and narrowly defined coverages (for example, heart attacks are only covered if they occur between 2 p.m. and 5 p.m. and in the left ventricle). That's an exaggeration, but we know that these are the types of impediments--typically found in major medical plans--that keep low-income workers from accessing their benefits. That's why the best limited-benefit plans are structured with easy enrollment, understandable administration and clear, straightforward benefits.

George Lehmann, a Best's Review columnist, is president of Insured Benefit Plan Inc., a life and health insurance brokerage firm based in Louisville, Ky. He can be reached at [e-mail].