Small businesses are the most rapidly growing segment of the economy, providing one half of all jobs in the United States. The health insurance industry must address issues which are unique to this market. The health insurance product for small businesses must have simple administration for the owners and easy access to quality medical care for the employees. Small businesses have been adversely affected by the high cost of health care. Numerous studies have shown that a major factor contributing to the high cost of health care is inappropriate and unnecessary utilization of health care. Until recently, techniques of utilization management have been difficult to adapt to the small group market. The Celtic Life Insurance Company has been using a managed care fee for service arrangement for the past three years. Celtic has been able to tailor a program for small businesses and maintain complete administrative coordination, instead of contracting with a private utilization review company. Our program maintains freedom of choice of providers and easy access to health care, without limiting access to specialists. Cost containment features have assisted insureds in selecting appropriate health care, in the appropriate setting while not interfering with the doctor-patient relationship.