Small Business Healthcare Relief Act of 2014

Summary: Small Business Healthcare Relief Act of 2014 - Amends the Internal Revenue Code to treat employer payments for employee health care premiums and for amounts paid on behalf of an employee to a health reimbursement arrangement as medical expenses under an accident or health plan and thus excludible from gross income for income tax purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Healthcare Relief Act 
of 2014''.

SEC. 2. PERMITTING SMALL BUSINESSES TO USE PRE-TAX DOLLARS FOR 
              ASSISTANCE TO EMPLOYEES PURCHASING POLICIES IN INDIVIDUAL 
              MARKET.

    (a) In General.--Section 106 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(e) Pre-Tax Dollars for Qualified Health Plans.--
            ``(1) In general.--Amounts paid by an eligible small 
        employer on behalf of an employee of the employer for premiums 
        for a qualified health plan (as defined in section 1301 of the 
        Patient Protection and Affordable Care Act)--
                    ``(A) which covers the employee, employee's spouse, 
                or any dependent of the employee, and
                    ``(B) which is offered in the individual market 
                within a State,
        shall be treated as employer-provided coverage for medical 
        expenses under an accident or health plan and shall not be 
        considered a group health plan for purposes of section 9815.
            ``(2) Eligible small employer.--For purposes of this 
        subsection and subsection (f), the term `eligible small 
        employer' means an employer who--
                    ``(A) is not an applicable large employer (as 
                defined in section 4980H(c)(2)(A)), and
                    ``(B) does not offer its employees any group health 
                plan other than an arrangement described in paragraph 
                (1) or subsection (f).
            ``(3) Certain controlled groups.--All employees who are 
        treated as employed by a single employer under subsection (b), 
        (c), or (m) of section 414 shall be treated as employed by a 
        single employer for purposes of this subsection.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2013.

SEC. 3. STANDALONE HEALTH REIMBURSEMENT ARRANGEMENTS.

    (a) In General.--Section 106 of the Internal Revenue Code is 
amended Code of 1986 is amended by adding at the end the following new 
subsection:
    ``(f) Qualified Health Reimbursement Arrangements.--
            ``(1) In general.--Amounts paid by an eligible small 
        employer on behalf of an employee of the employer to a 
        qualified health reimbursement arrangement shall be treated as 
        employer-provided coverage for medical expenses under an 
        accident or health plan and shall not be considered a group 
        health plan for purposes of section 9815.
            ``(2) In general.--For purposes of this subsection, the 
        term `qualified health reimbursement arrangement' means an 
        arrangement--
                    ``(A) under which the employee may be reimbursed--
                            ``(i) for premiums for a qualified health 
                        plan (as defined in section 1301 of the Patient 
                        Protection and Affordable Care Act) which 
                        covers the employee, employee's spouse, or any 
                        dependent of the employee, and is offered in 
                        the individual market within a State, and
                            ``(ii) for expenses incurred for medical 
                        care (as defined in section 213(d)) of the 
                        employee, the employee's spouse, or any such 
                        dependent of the employee,
                    ``(B) which is provided by an eligible small 
                employer, and
                    ``(C) under which contributions by the employer 
                with respect to an employee for the taxable year are 
                not in excess of the dollar amount in effect under 
                section 125(i) for such taxable year (200 percent of 
                such amount in the case of family coverage).
            ``(3) Certain controlled groups.--All employees who are 
        treated as employed by a single employer under subsection (b), 
        (c), or, (m) of section 414 shall be treated as employed by a 
        single employer for purposes of this subsection.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2013.

SEC. 4. NO SUBSIDIES ALLOWED WITH RESPECT TO HEALTH PLAN ACQUIRED 
              THROUGH PRE-TAX DOLLARS FOR QUALIFIED HEALTH PLAN OR 
              QUALIFIED HEALTH REIMBURSEMENT ARRANGEMENT.

    (a) Coordination With Premium Credit and Reduced Cost-Sharing.--
Section 36B(c)(2)(B) of such Code is amended by adding at the end the 
following new clause:
                            ``(iii) Pre-tax dollars for a qualified 
                        health plan and qualified health reimbursement 
                        arrangements.--The term `coverage month' shall 
                        not include any month during which an 
                        individual is covered under a qualified health 
                        plan any premiums for which were reimbursed 
                        under an arrangement described in section 
                        106(e) (relating to pre-tax dollars for a 
                        qualified health plan), or under a qualified 
                        health reimbursement arrangement (as defined in 
                        section 106(f)), during a calendar year which 
                        includes such month.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to months beginning after December 31, 2013.

SEC. 5. PRE-TAX DOLLARS FOR A QUALIFIED HEALTH PLAN AND QUALIFIED 
              HEALTH REIMBURSEMENT ARRANGEMENTS EXCEPTED FROM GROUP 
              HEALTH PLAN REQUIREMENTS.

    (a) In General.--Section 9832(c)(1) of such Code is amended by 
redesignating subparagraph (H) as subparagraph (J) and by inserting 
after subparagraph (G) the following new subparagraphs:
                    ``(H) An arrangement described in section 106(e) 
                (relating to pre-tax dollars for a qualified health 
                plan).
                    ``(I) Qualified health reimbursement arrangement 
                (as defined in section 106(f)).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to plan years beginning after December 31, 2013.