,,ii ,calendar ,no4 #ebf #aadth ,,congress #b;d ,session ,h4 ,r4 #eddg ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #bb1 #bjaf,received2 read the first time ,june #bc1 #bjaf,read the second time and placed on the calendar ,,an ,,act ,to provide an exception from certain group health plan requirements for qualified small employer health reimbursement arrangements4 #a4 ,short title ,this ,act may be cited as the ,small ,business ,health ,care ,relief ,act of #bjaf4 #b4 ,exception from group health plan requirements for qualified small employer health reimbursement arrangements 7a7 ,amendments to the ,internal ,revenue ,code of #aihf and the ,patient ,protection and ,affordable ,care ,act 7#a7 ,in general ,section #ihca of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7d7 ,exception for qualified small employer health reimbursement arrangements 7#a7 ,in general ,for purposes of this title 7except as provided in section #dihj;,i7f77#d7 and notwithstanding any other provision of this title71 the term group health plan shall not include any qualified small employer health reimbursement arrangement4 7#b7 ,qualified small employer health reimbursement arrangement ,for purposes of this subsection-- 7,a7 ,in general ,the term qualified small employer health reimbursement arrangement means an arrangement which-- 7i7 is described in subparagraph 7,b71 and 7ii7 is provided on the same terms to all eligible employees of the eligible employer4 7,b7 ,arrangement described ,an arrangement is described in this subparagraph if-- 7i7 such arrangement is funded solely by an eligible employer and no salary reduction contributions may be made under such arrangement1 7ii7 such arrangement provides1 after the employee provides proof of coverage1 for the payment of1 or reimbursement of1 an eligible employee for expenses for medical care 7as defined in section #bac7;d77 incurred by the eligible employee or the eligible employee's family members 7as determined under the terms of the arrangement71 and 7iii7 the amount of payments and reimbursements described in clause 7ii7 for any year do not exceed #e1acj 7#aj1bfj in the case of an arrangement that also provides for payments or reimbursements for family members of the employee74 7,c7 ,certain variation permitted ,for purposes of subparagraph 7,a77ii71 an arrangement shall not fail to be treated as provided on the same terms to each eligible employee merely because the employee's permitted benefits under such arrangement vary in accordance with the variation in the price of an insurance policy in the relevant individual health insurance market based on-- 7i7 the age of the eligible employee 7and1 in the case of an arrangement which covers medical expenses of the eligible employee's family members1 the age of such family members71 or 7ii7 the number of family members of the eligible employee the medical expenses of which are covered under such arrangement4 ,the variation permitted under the preceding sentence shall be determined by reference to the same insurance policy with respect to all eligible employees4 7,d7 ,rules relating to maximum dollar limitation 7i7 ,amount prorated in certain cases ,in the case of an individual who is not covered by an arrangement for the entire year1 the limitation under subparagraph 7,a77iii7 for such year shall be an amount which bears the same ratio to the amount which would 7but for this clause7 be in effect for such individual for such year under subparagraph 7,a77iii7 as the number of months for which such individual is covered by the arrangement for such year bears to #ab4 7ii7 ,inflation adjustment ,in the case of any year beginning after #bjaf1 each of the dollar amounts in subparagraph 7,a77iii7 shall be increased by an amount equal to-- 7,i7 such dollar amount1 multiplied by 7,,ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjae for calendar year #aiib in subparagraph 7,b7 thereof4 ,if any dollar amount increased under the preceding sentence is not a multiple of #ajj1 such dollar amount shall be rounded to the next lowest multiple of #ajj4 7#c7 ,other definitions ,for purposes of this subsection-- 7,a7 ,eligible employee ,the term eligible employee means any employee of an eligible employer1 except that the terms of the arrangement may exclude from consideration employees described in any clause of section #aje7;h77#c77;,b7 7applied by substituting #ij days for #c years in clause 7i7 thereof74 7,b7 ,eligible employer ,the term eligible employer means an employer that-- 7i7 is not an applicable large employer as defined in section #dihj;,h7c77#b71 and 7ii7 does not offer a group health plan to any of its employees4 7,c7 ,permitted benefit ,the term permitted benefit means1 with respect to any eligible employee1 the maximum dollar amount of payments and reimbursements which may be made under the terms of the qualified small employer health reimbursement arrangement for the year with respect to such employee4 7#d7 ,notice 7,a7 ,in general ,an employer funding a qualified small employer health reimbursement arrangement for any year shall1 not later than #ij days before the beginning of such year 7or1 in the case of an employee who is not eligible to participate in the arrangement as of the beginning of such year1 the date on which such employee is first so eligible71 provide a written notice to each eligible employee which includes the information described in subparagraph 7,b74 7,b7 ,contents of notice ,the notice required under subparagraph 7,a7 shall include each of the following3 7i7 ,a statement of the amount which would be such eligible employee's permitted benefits under the arrangement for the year4 7ii7 ,a statement that the eligible employee should provide the information described in clause 7i7 to any health insurance exchange to which the employee applies for advance payment of the premium assistance tax credit4 7iii7 ,a statement that if the employee is not covered under minimum essential coverage for any month the employee may be subject to tax under section #ejjj;,a for such month and reimbursements under the arrangement may be includible in gross income4 4 7#b7 ,limitation on exclusion from gross income ,section #ajf of such ,code is amended by adding at the end the following3 7g7 ,qualified small employer health reimbursement arrangement ,for purposes of this section and section #aje1 payments or reimbursements from a qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77 of an individual for medical care 7as defined in section #bac7;d77 shall not be treated as paid or reimbursed under employer-provided coverage for medical expenses under an accident or health plan if for the month in which such medical care is provided the individual does not have minimum essential coverage 7within the meaning of section #ejjj;,a7f774 4 7#c7 ,coordination with health insurance premium credit ,section #cf;,b7c7 of such ,code is amended by adding at the end the following new paragraph3 7#d7 ,special rules for qualified small employer health reimbursement arrangements 7,a7 ,in general ,the term coverage month shall not include any month with respect to an employee 7or any spouse or dependent of such employee7 if for such month the employee is provided a qualified small employer health reimbursement arrangement which constitutes affordable coverage4 7,b7 ,denial of double benefit ,in the case of any employee who is provided a qualified small employer health reimbursement arrangement for any coverage month 7determined without regard to subparagraph 7,a771 the credit otherwise allowable under subsection 7a7 to the taxpayer for such month shall be reduced 7but not below zero7 by the amount described in subparagraph 7,c77i77,,ii7 for such month4 7,c7 ,affordable coverage ,for purposes of subparagraph 7,a71 a qualified small employer health reimbursement arrangement shall be treated as constituting affordable coverage for a month if-- 7i7 the excess of-- 7,i7 the amount that would be paid by the employee as the premium for such month for self-only coverage under the second lowest cost silver plan offered in the relevant individual health insurance market1 over 7,,ii7 #aab of the employee's permitted benefit 7as defined in section #ihca7;d77#c77;,c77 under such arrangement1 does not exceed-- 7ii7 #aab of #i4e percent of the employee's household income4 7,d7 ,qualified small employer health reimbursement arrangement ,for purposes of this paragraph1 the term qualified small employer health reimbursement arrangement has the meaning given such term by section #ihca7;d77#b74 7,e7 ,coverage for less than entire year ,in the case of an employee who is provided a qualified small employer health reimbursement arrangement for less than an entire year1 subparagraph 7,c77i77,,ii7 shall be applied by substituting the number of months during the year for which such arrangement was provided for #ab4 7,f7 ,indexing ,in the case of plan years beginning in any calendar year after #bjad1 the ,secretary shall adjust the #i4e percent amount under subparagraph 7,c77ii7 in the same manner as the percentages are adjusted under subsection 7b77#c77;,a77ii74 4 7#d7 ,application of excise tax on high cost employer-sponsored health coverage 7,a7 ,in general ,section #dihj;,i7f77#d7 of such ,code is amended by adding at the end the following3 ,section #ihca7;d77#a7 shall not apply for purposes of this section44 7,b7 ,determination of cost of coverage ,section #dihj;,i7d77#b7 of such ,code is amended by redesignating subparagraph 7,d7 as subparagraph 7,e7 and by inserting after subparagraph 7,c7 the following new subparagraph3 7,d7 ,qualified small employer health reimbursement arrangements ,in the case of applicable employer-sponsored coverage consisting of coverage under any qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77#b771 the cost of coverage shall be equal to the amount described in section #fjea7;a77#ae74 4 7#e7 ,enforcement of notice requirement ,section #ffeb of such ,code is amended by adding at the end the following new subsection3 7o7 ,failure ,to provide notices with respect ,to qualified small employer health reimbursement arrangements ,in the case of each failure to provide a written notice as required by section #ihca7;d77#d71 unless it is shown that such failure is due to reasonable cause and not willful neglect1 there shall be paid1 on notice and demand of the ,secretary and in the same manner as tax1 by the person failing to provide such written notice1 an amount equal to #ej per employee per incident of failure to provide such notice1 but the total amount imposed on such person for all such failures during any calendar year shall not exceed #b1ejj4 4 7#f7 ,reporting 7,a7 ,w-#b reporting ,section #fjea7;a7 of such ,code is amended by striking and at the end of paragraph 7#ac71 by striking the period at the end of paragraph 7#ad7 and inserting 1 and1 and by inserting after paragraph 7#ad7 the following new paragraph3 7#ae7 the total amount of permitted benefit 7as defined in section #ihca7;d77#c77;,c77 for the year under a qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77#b77 with respect to the employee4 4 7,b7 ,information required to be provided by exchange subsidy applicants ,section #adaa7;b77#c7 of the ,patient ,protection and ,affordable ,care ,act is amended by redesignating subparagraph 7,b7 as subparagraph 7,c7 and by inserting after subparagraph 7,a7 the following new subparagraph3 7,b7 ,certain individual health insurance policies obtained through small employers ,the amount of the enrollee's permitted benefit 7as defined in section #ihca7;d77#c77;,c7 of the ,internal ,revenue ,code of #aihf7 under a qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77#b7 of such ,code74 4 7#g7 ,effective dates 7,a7 ,in general ,except as otherwise provided in this paragraph1 the amendments made by this subsection shall apply to years beginning after the earlier of-- 7i7 the date that is #ij days after the date of the enactment of this ,act1 or 7ii7 ,december #ca1 #bjaf4 7,b7 ,transition relief ,the relief under ,treasury ,notice #bjae-ag shall be treated as applying to any plan year beginning on or before the date described in subparagraph 7,a74 7,c7 ,coordination with health insurance premium credit ,the amendments made by paragraph 7#c7 shall apply to taxable years beginning after the date described in subparagraph 7,a74 7,d7 ,employee notice ,the amendments made by paragraph 7#e7 shall apply to notices with respect to years beginning after the date described in subparagraph 7,a74 7,e7 ,w-#b reporting ,the amendments made by paragraph 7#f77;,a7 shall apply to calendar years beginning after ,december #ca1 #bjaf4 7,f7 ,information provided by exchange subsidy applicants 7i7 ,in general ,the amendments made by paragraph 7#f77;,b7 shall apply to applications for enrollment made after the date described in subparagraph 7,a74 7ii7 ,verification ,verification under section #adaa of the ,patient ,protection and ,affordable ,care ,act of information provided under section #adaa7;b77#c77;,b7 of such ,act shall apply with respect to months beginning after ,october #bjaf4 7#h7 ,substantiation requirements ,the ,secretary of the ,treasury 7or his designee7 may issue substantiation requirements as necessary to carry out this subsection4 7b7 ,amendments to the ,employee ,retirement ,income ,security ,act of #aigd 7#a7 ,in general ,section #gcc7;a77#a7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aaia;b7a77#a77 is amended by adding at the end the following3 ,such term shall not include any qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77#b7 of the ,internal ,revenue ,code of #aihf744 7#b7 ,exception from continuation coverage requirements1 etc ,section #fjg7a7 of such ,act 7#bi ,u4,s4,c4 #aafg7a77 is amended by adding at the end the following3 ,such term shall not include any qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77#b7 of the ,internal ,revenue ,code of #aihf744 7#c7 ,effective date ,the amendments made by this subsection shall apply to plan years beginning after the date described in subsection 7a77#g77;,a74 7c7 ,amendments to the ,public ,health ,service ,act 7#a7 ,in general ,section #bgia7;a77#a7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #cjj;gg-#ia7;a77#a77 is amended by adding at the end the following3 ,except for purposes of part ,c of title ,,xi of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;d et seq471 such term shall not include any qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77#b7 of the ,internal ,revenue ,code of #aihf744 7#b7 ,exception from continuation coverage requirements ,section #bbjh7a7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #cjj;bb-#h7a77 is amended by adding at the end the following3 ,such term shall not include any qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77#b7 of the ,internal ,revenue ,code of #aihf744 7#c7 ,effective date ,the amendments made by this subsection shall apply to plan years beginning after the date described in subsection 7a77#g77;,a74 ,passed the ,house of ,representatives ,june #ba1 #bjaf4,karen ,l4 ,haas1,clerk ,june #bc1 #bjaf,read the second time and placed on the calendar