I 

112TH CONGRESS 

2D SESSION H. R. 4324 

To amend the Internal Revenue Code of 1986 to expand the credit for 

employee health insurance expenses of small employers. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 29, 2012 

Mr. KIND (for himself and Mr. MCDERMOTT) introduced the following bill; 

which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to expand 

the credit for employee health insurance expenses of 

small employers. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Small Business Em5 ployee Health Insurance Credit Expansion Act of 2012’’. 

6 SEC. 2. EXPANSION OF CREDIT FOR EMPLOYEE HEALTH IN7 SURANCE EXPENSES OF SMALL EMPLOYERS. 

8 (a) INCREASE IN MAXIMUM NUMBER OF ELIGIBLE

9 FULL-TIME EMPLOYEES.—Subparagraph (A) of section 

10 45R(d)(1) of the Internal Revenue Code of 1986 is 


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1 amended by striking ‘‘25 full-time equivalent employees’’ 

2 and inserting ‘‘50 full-time equivalent employees’’. 

3 (b) MODIFICATION OF PHASEOUT OF CREDIT

4 AMOUNT.— 

5 (1) IN GENERAL.—Subsection (c) of section 

6 45R of such Code is amended to read as follows: 

7 ‘‘(c) PHASEOUT OF CREDIT AMOUNT BASED ON

8 NUMBER OF EMPLOYEES AND AVERAGE WAGES.— 

9 ‘‘(1) IN GENERAL.—The amount of the credit 

10 determined under subsection (b) shall be adjusted by 

11 multiplying— 

12 ‘‘(A) the amount determined under sub13 section (b), by 

14 ‘‘(B) the product of the amount deter15 mined under paragraph (2) and the amount de16 termined under paragraph (3). 

17 ‘‘(2) EMPLOYEE ADJUSTMENT.—The amount 

18 determined under this paragraph is a fraction (not 

19 more than 1) the numerator of which is the number 

20 by which the total number of full-time equivalent 

21 employees of the eligible employer is less than 50 

22 and the denominator of which is 30. 

23 ‘‘(3) WAGES ADJUSTMENT.—The amount deter24 mined under this paragraph is a fraction (not more 

25 than 1) the numerator of which is the amount by 


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1 which the average annual wages of the eligible em2 ployer is less than twice the dollar amount in effect 

3 under subsection (d)(3)(B) and the denominator of 

4 which is such dollar amount.’’. 

5 (2) CONFORMING AMENDMENTS.— 

6 (A) Subsection (a) of section 45R of such 

7 Code is amended by inserting ‘‘, as adjusted 

8 under subsection (c)’’ after ‘‘the amount deter9 mined under subsection (b)’’. 

10 (B) Subparagraph (B) of section 

11 45R(d)(3) of such Code is amended by striking 

12 ‘‘subsection (c)(2)’’ and inserting ‘‘subsection 

13 (c)(3)’’. 

14 (c) REPEAL OF UNIFORMITY REQUIREMENT FOR

15 CONTRIBUTIONS.—Paragraph (4) of section 45R(d) of 

16 such Code is amended— 

17 (1) by striking ‘‘in an amount equal to a uni18 form percentage (not less than 50 percent) of the 

19 premium cost of the qualified health plan’’, and 

20 (2) by inserting ‘‘(in an amount not less than 

21 50 percent of the premium cost of the qualified 

22 health plan)’’ after ‘‘nonelective contribution’’. 

23 (d) REPEAL OF LIMITATION BASED ON STATE AVER24 AGE PREMIUMS.— 


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1 (1) IN GENERAL.—Subsection (b) of section 

2 45R of such Code is amended to read as follows: 

3 ‘‘(b) HEALTH INSURANCE CREDIT AMOUNT.—Sub4 ject to subsection (c), the amount determined under this 

5 subsection with respect to any eligible small employer is 

6 equal to 50 percent (35 percent in the case of a tax-exempt 

7 eligible small employer) of the aggregate amount of non8 elective contributions the employer made on behalf of its 

9 employees during the taxable year under the arrangement 

10 described in subsection (d)(4) for premiums for qualified 

11 health plans offered by the employer to its employees 

12 through an Exchange.’’. 

13 (2) CONFORMING AMENDMENT.—Paragraph (2) 

14 of section 45R(g) of such Code is amended by in15 serting ‘‘and’’ at the end of subparagraph (A), by 

16 striking ‘‘, and’’ at the end of subparagraph (B) and 

17 inserting a period, and by striking subparagraph 

18 (C). 

19 (e) REPEAL OF 2-YEAR CREDIT LIMIT.— 

20 (1) Subsection (a) of section 45R of such Code 

21 is amended by striking ‘‘in the credit period’’. 

22 (2) Subsection (e) of section 45R of such Code 

23 is amended by striking paragraph (2) and by redes24 ignating paragraphs (3), (4), and (5) as paragraphs 

25 (2), (3), and (4), respectively. 


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1 (3) Subsection (g) of section 45R of such Code 

2 is amended by striking paragraph (1) and by redes3 ignating paragraphs (2) and (3) as paragraphs (1) 

4 and (2), respectively. 

5 (4) Subsection (i) of section 45R of such Code 

6 is amended by striking ‘‘the avoidance of the 2-year 

7 limit on the credit period through the use of suc8 cessor entities and’’. 

9 (f) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to taxable years beginning after 

11 December 31, 2011. 

Æ 


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