INDIANAPOLIS | Small businesses in Indiana now can band together in an effort to broker better deals from health insurance providers.

The Indiana Department of Insurance on Friday issued a two-page directive spelling out the rules through which employers can take advantage of the pooling program legislators authorized last year. The joint purchasing option is open to businesses with between two and 50 employees.

"The goal of this is to provide small businesses an additional tool in their toolbox," said Indiana Insurance Commissioner Jim Atterholt. "It's an additional option or choice that, given the right circumstances, could be beneficial to them."

Atterholt said the rules issued by his agency allow a pool of businesses to be treated like a larger employer when it comes to setting insurance rates, but insurers are not required to offer coverage to any pool. A trade association or similar business group must be in existence for at least two years before it could start an insurance purchasing pool.

"We think this is an exciting development," said Barbara Quandt, Indiana state director for the National Federation of Independent Business. "So many small businesses can't afford insurance at all for their employees."

The small business pooling option is the final plank of a 2007 health care expansion Indiana lawmakers financed with a 44-cent increase in the state cigarette tax. The centerpiece is the Healthy Indiana Plan, which is providing health insurance to more than 20,000 working adults who earn up to double the poverty line.

The legislation also began allowing dependent children to remain on a parent's health insurance plan until age 24. The cutoff had been 21 for those enrolled in college and 19 for children not in school. Atterholt said the extension does not apply to self-insured companies, which represent 70 percent of Indiana employers.