This chapter explores the nature and initial effects of state efforts to make health insurance more available to small employers. It focuses on three forms of legislation that affect the market for small-group coverage: the first type are state laws allowing insurers to sell “bare-bones” policies to small firms newly entering the group coverage market. The second set of state initiatives relates to tax credits or other small-employer subsidies. The third set of laws relates to the underwriting methods that insurers can use in setting premiums in the small-group market. The chapter summarizes the problem, looking at the extent to which small employers are offering coverage. It describes the nature of state legislation affecting the small-group market. The chapter considers the potential effectiveness of the measures, drawing on the existing literature and reporting findings from our 1993 survey of small employers.