Objective. —To evaluate whether employers who do not provide health insurance would offer such benefits after a 50% reduction in the price of health insurance. Design. —Using a survey of 530 firms at two sites in New York State, we estimate the number of firms that added insurance during 1988 as a percentage of firms that were eligible for the subsidy. We use this proportion as an estimate for the number of firms that would have added insurance in the absence of the subsidy program. We then estimate the number of firms adding insurance during the initial year of the program, 1989. Setting. —The subsidized health insurance pilot projects were available in Brooklyn and in the Albany-Plattsburgh-Poughkeepsie region of New York State. Intervention. —New York State subsidized the price of health insurance, reducing it by 50%. Eligible employers were responsible for paying the remaining portion of the premium. Results. —The subsidized health insurance products increased the number of small firms (under 20 employees) offering insurance by a small amount, approximately a 3.5 percentage point increase. When fully implemented and assuming all eligible employers were aware of the program, the subsidy would increase the proportion of firms offering insurance by 16.5 percentage points. We view this as an upper boundary. Conclusions. —Increased program visibility and allowing the employee to share in the premium payment may increase the number of employers offering insurance. Even under ideal conditions, however, the results highlight the limitations of voluntary programs to increase the number of employers offering health insurance. (JAMA. 1992;267:945-948)