,,ii #aadth ,,congress #ast ,session ,s4 #afig ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #be1 #bjae,mr4 ,grassley 7for himself and ,ms4 ,heitkamp7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to provide an exception from certain group health plan requirements to allow small businesses to use pre-tax dollars to assist employees in the purchase of policies in the individual health insurance market1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,small ,business ,healthcare ,relief ,act4 #b4 ,exception from group health plan requirements to allow small businesses to use pre-tax dollars to assist employees in the purchase of health insurance in the individual market 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 ,certain individual health insurance policies obtained through small employers 7#a7 ,in general ,the requirements of this chapter shall not apply to 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 offered 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 and 7ii7 such arrangement provides1 after the employee provides proof of coverage to the employer1 for the payment of1 or reimbursement of1 an eligible employee for-- 7,i7 expenses for medical care 7as defined by subparagraphs 7,a71 7,b71 and 7,c7 section #bac7;d77 incurred by the eligible employee or the eligible employee's family members 7as determined under the terms of the arrangement71 and 7,,ii7 including for-- 7aa7 insurance 7within the meaning of section #bac7;d77#a77;,d77 purchased on the individual health insurance market1 and 7bb7 premiums under part ,b of title ,,xviii of the ,social ,security ,act and any medicare supplemental policy under section #ahhb of such ,act4 7,c7 ,payments for other insurance not permitted under arrangement ,an arrangement shall not be treated as described in subparagraph 7,b7 if the arrangement permits the employee to pay premiums for health insurance coverage for the employee under the employee's spouse or other family member health insurance coverage4 7,d7 ,certain variation permitted ,for purposes of subparagraph 7,a77ii71 an arrangement shall not fail to be treated as offered on the same terms to all eligible employees merely because the employer contributions under such arrangement vary based on the number of individuals covered under such policy4 ,the preceding sentence shall not apply unless such variation is consistently applied to all eligible employees and is consistent with the price variation of coverage under health insurance obtained in the relevant individual health insurance market4 7#c7 ,other definitions ,for purposes of this subsection-- 7,a7 ,eligible employee ,the term eligible employee means any employee of the employer 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 7other than a qualified small employer health reimbursement arrangement7 to any of its employees4 7,c7 ,individual health insurance policy ,the term individual health insurance policy means individual health insurance coverage 7as defined in section #bgia7;b7 of the ,public ,health ,service ,act7 which is offered by a health insurance issuer 7as so defined in such section74 4 7#b7 ,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 7#a7 ,in general ,in the case of an individual who is an eligible employee 7as defined in paragraph 7#c77;,a7 of section #ihca7;d77 with respect to an eligible employer 7as defined in paragraph 7#c77;,b7 of such section71 the applicable percentage of the aggregate contributions made for the taxable year by the eligible employer under a qualified small employer health reimbursement arrangement 7as defined in paragraph 7#b7 of such section7 with respect to the employee shall be treated as employer-provided coverage for medical expenses under an accident or health plan4 7#b7 ,applicable percentage ,for purposes of paragraph 7#a7 the applicable percentage shall be-- 7,a7 #be percent if the employee is covered for less than #c months in the taxable year by the qualified small employer health reimbursement arrangement and the employee draws amounts from the arrangement in any month during which the employee is not so covered1 7,b7 #ej percent if the employee is covered for more than #c months but less than #f months in the taxable year by the qualified small employer health reimbursement arrangement and the employee draws amounts from the arrangement in any month during which the employee is not so covered1 7,c7 #ge percent if the employee is covered for more than #f months but less than #i months in the taxable year by the qualified small employer health reimbursement arrangement and the employee draws amounts from the arrangement in any month during which the employee is not so covered1 and 7,d7 #ajj percent if the employee is covered for more than #i months in the taxable year by the qualified small employer health reimbursement arrangement4 7#c7 ,rule for special enrollment ,in the case of an employee who first becomes covered under the qualified small employer health reimbursement arrangement by reason of enrollment during a special enrollment period for qualifying events 7under section #fjc of ,employee ,retirement ,income and ,security ,act71 in lieu of paragraph 7#b7 the applicable percentage shall be the ratio 7expressed as a percentage7 that-- 7,a7 the number of the months in the taxable year for which such employee is covered by such arrangement1 bears to 7,b7 the total number of months in the taxable year for which such employee is eligible to be covered by such arrangement4 4 7#c7 ,exception from continuation coverage requirements ,section #dihj;,b7d7 of such ,code is amended by striking or at the end of paragraph 7#b71 by striking the period at the end of paragraph 7#c7 and inserting 1 or1 and by adding at the end the following new paragraph3 7#d7 any qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77#b774 4 7#d7 ,exception from excise tax on high cost employer-sponsored health 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 following3 7,d7 ,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 the coverage shall be the amount reported under section #fjea7;a77#ae74 4 7#e7 ,prevention of double benefit under health insurance premium credit ,section #cf;,b7c77#b7 of such ,code is amended by adding at the end the following new subparagraph3 7,e7 ,special rule for certain individual health insurance policies obtained through small employers 7i7 ,in general ,the term coverage month shall not include any month with respect to an employee if for such month the employee is offered affordable coverage under an individual health insurance policy 7as defined under section #ihca7;d77#c77;,c77 under a qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77#b774 7ii7 ,affordable ,for purposes of clause 7i71 coverage shall be treated as affordable for a month if-- 7,i7 #a_/ab of the employer's contribution to the employee for a year under such arrangement is not less than the amount that would be paid by the employee for the premium for such month for the applicable second lowest cost self-only silver plan for self-only coverage with respect to the employee's individual market1 and 7,,ii7 the employee's cost for coverage under the individual health insurance policy under the qualified small employer health reimbursement arrangement for a year does not exceed the #i4e percent of the employee's household income4 4 7#f7 ,employee notice ,section #aja of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajba7 is amended by adding at the end the following3 7o7 ,notice relating to health reimbursement arrangements ,an employer maintaining a qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77#b7 of the ,internal ,revenue ,code of #aihf7 shall1 upon an election by an employee to participate in such qualified small employer health reimbursement arrangement1 provide notice to the employee that if the employee is not covered under such arrangement for at least #i of #ab months in the plan year1 any funds under such arrangement may be includible in gross income4 4 7#g7 ,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 employer contributions made 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 7i7 ,in general ,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 months 7if any7 which the enrollee has or expects to have coverage under an individual health insurance policy 7as defined in section #ihca7;d77#c77;,c7 of the ,internal ,revenue ,code of #aihf7 provided under a qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77#b7 of such ,code74 4 7ii7 ,special rule relating to verification of information required to be provided by exchange applicants ,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 ,effective date ,the amendments made by this subsection shall apply to months beginning after the date of the enactment of this ,act4 7b7 ,amendments to the ,employee ,retirement ,income ,security ,act of #aigd 7#a7 ,in general ,section #gcb of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aaia;a7 is amended by redesignating subsection 7d7 as subsection 7e7 and by inserting after subsection 7c7 the following new subsection3 7d7 ,exception for certain individual health insurance policies obtained through small employers ,the requirements of this part shall not apply to any qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77#b7 of the ,internal ,revenue ,code of #aihf74 4 7#b7 ,exception from continuation coverage requirements ,section #fja of such ,act 7#bi ,u4,s4,c4 #aafa7 is amended by adding at the end the following new subsection3 7c7 ,exception for certain individual health insurance policies obtained through small employers ,subsection 7a7 shall not apply to any qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77#b7 of the ,internal ,revenue ,code of #aihf74 4 7#c7 ,exception from certain other group health plan requirements ,section #fji of such ,act 7#bi ,u4,s4,c4 #aafi7 is amended by redesignating subsection 7e7 as subsection 7f7 and by inserting after subsection 7d7 the following new subsection3 7e7 ,exception for certain individual health insurance policies obtained through small employers ,the requirements of this section shall not apply to any qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77#b7 of the ,internal ,revenue ,code of #aihf74 4 7#d7 ,effective date ,the amendments made by this subsection shall apply to months beginning after the date of the enactment of this ,act4 7c7 ,amendments to ,public ,health ,service ,act 7#a7 ,in general ,part ,c of title ,,xxvii of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #cjj;gg-#ia et seq47 is amended by adding at the end the following new section3 #bgif4 ,exception for certain small employer plans to provide individual health insurance policies 7a7 ,in general ,the requirements of this title shall not apply to any qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77#b7 of the ,internal ,revenue ,code of #aihf74 7b7 ,exception not applicable to individual health insurance offered under the plan or arrangement ,subsection 7a7 shall not apply with respect to any individual health insurance policy 7as defined in section #ihca7;d77#c77;,c7 of such ,code7 offered under any such arrangement4 4 7#b7 ,exception from continuation coverage requirements ,title ,,xxii of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #cjj;bb-#a et seq47 is amended by adding at the end the following new section3 #bbji4 ,exception for certain small employer plans to provide individual health insurance policies ,the requirements of this title shall not apply to any qualified small employer health reimbursement arrangement 7as defined in section #ihca7;d77#b7 of the ,internal ,revenue ,code of #aihf74 4 7#c7 ,effective date ,the amendments made by this subsection shall apply to months beginning after the date of the enactment of this ,act4