II 

109TH CONGRESS 

2D SESSION S. 2457 

To amend the Internal Revenue Code to provide incentives for supplying 

health insurance to employees of small employers, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 27, 2006 

Ms. SNOWE introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code to provide incentives 

for supplying health insurance to employees of small 

employers, and for other purposes. 

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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Small Business Health Insurance Relief Act of 2006’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—HEALTH CARE COVERAGE TAX INCENTIVES FOR SMALL 

BUSINESSES 

Subtitle A—Credit for Provision of Health Insurance 


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Sec. 101. Credit for health care contributions by small business employers. 

Subtitle B—Simple Cafeteria Plans 

Sec. 111. Establishment of simple cafeteria plans for small businesses. 

Sec. 112. Modifications of rules applicable to cafeteria plans. 

Sec. 113. Modification of rules applicable to flexible spending arrangements. 

Subtitle C—Incentives for Insurance Companies 

Sec. 121. Special deduction for certain health insurance companies in the small 

group market. 

Sec. 122. Credit for licensing costs of certain health insurance companies. 

TITLE II—SMALL BUSINESS HEALTH INSURANCE INFORMATION 

PILOT PROGRAM 

Sec. 201. Purpose. 

Sec. 202. Definitions. 

Sec. 203. Small Business Health Insurance Information Pilot Program. 

Sec. 204. Reports. 

Sec. 205. Authorization of appropriations. 

1 TITLE I—HEALTH CARE COV2 ERAGE TAX INCENTIVES FOR 

3 SMALL BUSINESSES 

4 Subtitle A—Credit for Provision of 

5 Health Insurance 

6 SEC. 101. CREDIT FOR HEALTH CARE CONTRIBUTIONS BY 

7 SMALL BUSINESS EMPLOYERS. 

8 (a) IN GENERAL.—Subpart B of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 

10 1986 (relating to other credits) is amended by adding at 

11 the end the following new section: 

12 ‘‘SEC. 30D. SMALL EMPLOYER HEALTH CARE CONTRIBU13 TIONS. 

14 ‘‘(a) GENERAL RULE.—In the case of an eligible em15 ployer, there shall be allowed as a credit against the tax 


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1 imposed by this chapter for the taxable year an amount 

2 equal to the applicable percentage of the sum of— 

3 ‘‘(1) the amounts contributed by such employer 

4 for qualified health insurance coverage with respect 

5 to any full-time employee during the taxable year, 

6 plus 

7 ‘‘(2) the amounts contributed by such employer 

8 to any health savings account (as defined in section 

9 223(d)) of any full-time employee who is an eligible 

10 individual (as defined in section 223(c)(1)) during 

11 the taxable year. 

12 ‘‘(b) LIMITATIONS.— 

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

14 allowed under subsection (a) with respect to any em15 ployee for any taxable year shall not exceed— 

16 ‘‘(A) in the case of an employee with self17 only coverage, $1,500, and 

18 ‘‘(B) in the case of an employee with fam19 ily coverage, $3,000. 

20 ‘‘(2) LIMITATION ON PREMIUMS.—The amount 

21 taken into account under subsection (a)(1) with re22 spect to any employee for any taxable year shall not 

23 exceed an amount equal to the product of— 


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1 ‘‘(A) $1,500 ($3,000 if coverage for all 

2 months described in subparagraph (B)(i) is 

3 family coverage), and 

4 ‘‘(B) a fraction— 

5 ‘‘(i) the numerator of which is the 

6 number of months during the taxable year 

7 for which such employee participated in 

8 qualified health insurance coverage, and 

9 ‘‘(ii) the denominator of which is the 

10 number of months in the taxable year. 

11 ‘‘(3) LIMITATION ON HSA CONTRIBUTIONS.— 

12 The amount taken into account under subsection 

13 (a)(2) with respect to any employee for any taxable 

14 year shall not exceed an amount equal to the prod15 uct of— 

16 ‘‘(A) $1,500 ($3,000 if coverage for all 

17 months described in subparagraph (B)(i) is 

18 family coverage), and 

19 ‘‘(B) a fraction— 

20 ‘‘(i) the numerator of which is the 

21 number of months that the employee was 

22 covered under a high deductible health 

23 plan (as defined under section 223(c)(2)) 

24 maintained by the employer, and 


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1 ‘‘(ii) the denominator of which is the 

2 number of months in the taxable year. 

3 ‘‘(c) APPLICABLE PERCENTAGE.—For purposes of 

4 subsection (a), the applicable percentage shall be— 

5 ‘‘(1) in the case of an eligible employer with 

6 less than 10 employees, 100 percent, 

7 ‘‘(2) in the case of an eligible employer with 

8 more than 9 employees but less than 20 employees, 

9 80 percent, 

10 ‘‘(3) in the case of an eligible employer with 

11 more than 19 employees but less than 30 employees, 

12 60 percent, 

13 ‘‘(4) in the case of an eligible employer with 

14 more than 29 employees but less than 40 employees, 

15 40 percent, and 

16 ‘‘(5) in the case of an eligible employer with 

17 more than 39 employees, 20 percent. 

18 ‘‘(d) ELIGIBLE EMPLOYER.—For purposes of this 

19 section, the term ‘eligible employer’ means, with respect 

20 to any taxable year, an employer— 

21 ‘‘(1) with 50 or fewer employees, and 

22 ‘‘(2) whose average annual gross receipts for 

23 the 3-taxable year period ending with the taxable 

24 year preceding such taxable year does not exceed 

25 $10,000,000. 


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1 ‘‘(e) QUALIFIED HEALTH INSURANCE COVERAGE.— 

2 For purposes of this section, the term ‘qualified health in3 surance coverage’ means health insurance coverage pur4 chased or provided by an eligible employer. Such term in5 cludes health insurance coverage purchased through a 

6 small business health plan (as defined in section 

7 833(b)(4)(C)). 

8 ‘‘(f) SPECIAL RULES.—For purposes of this sec9 tion— 

10 ‘‘(1) DETERMINATION OF NUMBER OF EMPLOY11 EES.— 

12 ‘‘(A) IN GENERAL.—The number of em13 ployees of an employer with respect to any year 

14 shall be determined by the using the average 

15 number of full-time employees of the employer 

16 on business days during the 2 preceding years. 

17 For purposes of this subparagraph, a year may 

18 only be taken into account if the employer was 

19 in existence throughout the year. 

20 ‘‘(B) EMPLOYERS NOT IN EXISTENCE IN

21 PRECEDING YEAR.—In the case of an employer 

22 which was not in existence throughout the pre23 ceding calendar year, the determination under 

24 subparagraph (A) shall be based on the average 

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1 ably expected such employer will employ on 

2 business days in the current calendar year. 

3 ‘‘(C) SPECIAL RULES.— 

4 ‘‘(i) PREDECESSORS.—Any reference 

5 in this paragraph to an employer shall in6 clude a reference to any predecessor of 

7 such employer. 

8 ‘‘(ii) AGGREGATION RULES.—All per9 sons treated as a single employer under 

10 subsection (a) or (b) of section 52, or sub11 section (n) or (o) of section 414, shall be 

12 treated as one person. 

13 ‘‘(2) SELF-EMPLOYED INDIVIDUAL TREATED AS

14 EMPLOYEE.—For purposes of this section, rules 

15 similar to the rules of section 401(c) shall apply. 

16 ‘‘(3) SALARY REDUCTION CONTRIBUTIONS.— 

17 For purposes of subsection (a)(1), amounts contrib18 uted under a cafeteria plan under section 125 shall 

19 not be considered to be amounts contributed by the 

20 eligible employer for qualified health insurance cov21 erage. 

22 ‘‘(4) DISALLOWANCE OF DEDUCTION.—No de23 duction shall be allowed for the taxable year for that 

24 portion of amounts contributed for qualified health 

25 insurance coverage and to health savings accounts 


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1 during the taxable year which is equal to the credit 

2 determined under subsection (a). 

3 ‘‘(5) ELECTION NOT TO CLAIM CREDIT.—This 

4 section shall not apply to a taxpayer for any taxable 

5 year if such taxpayer elects to have this section not 

6 apply for such taxable year. 

7 ‘‘(6) SPECIAL RULE FOR MARRIED INDIVID8 UALS.—For purposes of subsection (b)(2), rules 

9 similar to the rules of section 223(b)(5) (other than 

10 subparagraph (B)(i) thereof) shall apply. 

11 ‘‘(g) CARRYOVER OF UNUSED CREDIT AMOUNTS.— 

12 ‘‘(1) IN GENERAL.—If the credit allowable 

13 under subsection (a) for a taxable year exceeds the 

14 limitation under paragraph (1) for such taxable 

15 year, such excess shall be allowed— 

16 ‘‘(A) as a credit carryback to each of the 

17 3 taxable years preceding such year, and 

18 ‘‘(B) as a credit carryforward to each of 

19 the 10 taxable years following such year. 

20 ‘‘(2) AMOUNT CARRIED TO EACH YEAR.—For 

21 purposes of this paragraph, rules similar to the rules 

22 of section 39(a)(2) shall apply. 

23 ‘‘(h) COST-OF-LIVING ADJUSTMENTS.— 

24 ‘‘(1) LIMITATION.—In the case of taxable years 

25 beginning after 2007, each of the $1,500 and 


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1 $3,000 amounts under subsection (b) shall each be 

2 increased by an amount equal to— 

3 ‘‘(A) such dollar amount, multiplied by 

4 ‘‘(B) the cost-of-living adjustment deter5 mined under section 1(f)(3) for the calendar 

6 year in which the taxable year begins, deter7 mined by substituting ‘2006’ for ‘1992’ in sub8 paragraph (B) thereof. 

9 If any dollar amount as increased under this clause 

10 is not a multiple of $100, such dollar amount shall 

11 be rounded to the next lowest multiple of $100. 

12 ‘‘(2) ELIGIBLE EMPLOYER.—In the case of tax13 able years beginning after 2007, the $10,000,000 

14 amount under subsection (d)(2) shall be increased 

15 by an amount equal to— 

16 ‘‘(A) $10,000,000, multiplied by 

17 ‘‘(B) the cost-of-living adjustment deter18 mined under section 1(f)(3) for the calendar 

19 year in which the taxable year begins, deter20 mined by substituting ‘2006’ for ‘1992’ in sub21 paragraph (B) thereof. 

22 If any dollar amount as increased under this clause 

23 is not a multiple of $100,000, such dollar amount 

24 shall be rounded to the next lowest multiple of $100. 


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1 ‘‘(i) REGULATIONS.—The Secretary shall promulgate 

2 regulations to prevent employer contributions to health 

3 savings accounts under subsection (a)(2) to be used for 

4 purposes other than qualified medical expenses (as defined 

5 in section 223(d)(2)).’’. 

6 (b) CONFORMING AMENDMENT.—Section 6501(m) of 

7 the Internal Revenue Code of 1986 is amended by insert8 ing ‘‘30D(f)(5),’’ after ‘‘30C(e)(4),’’. 

9 (c) CLERICAL AMENDMENT.—The table of sections 

10 for subpart B of part IV of subchapter A of chapter 1 

11 of the Internal Revenue Code of 1986 is amended by in12 serting after the item relating to section 30C the following 

13 new item: 

‘‘Sec. 30D. Small employer health care contributions.’’. 

14 (d) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to contributions made in taxable 

16 years beginning after December 31, 2006. 

17 Subtitle B—Simple Cafeteria Plans 

18 SEC. 111. ESTABLISHMENT OF SIMPLE CAFETERIA PLANS 

19 FOR SMALL BUSINESSES. 

20 (a) IN GENERAL.—Section 125 of the Internal Rev21 enue Code of 1986 (relating to cafeteria plans) is amended 

22 by redesignating subsections (h) and (i) as subsections (i) 

23 and (j), respectively, and by inserting after subsection (g) 

24 the following new subsection: 


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1 ‘‘(h) SIMPLE CAFETERIA PLANS FOR SMALL BUSI2 NESSES.— 

3 ‘‘(1) IN GENERAL.—An eligible employer main4 taining a simple cafeteria plan with respect to which 

5 the requirements of this subsection are met for any 

6 year shall be treated as meeting any applicable non7 discrimination requirement with respect to benefits 

8 provided under the plan during such year. 

9 ‘‘(2) SIMPLE CAFETERIA PLAN.—For purposes 

10 of this subsection, the term ‘simple cafeteria plan’ 

11 means a cafeteria plan— 

12 ‘‘(A) which is established and maintained 

13 by an eligible employer, and 

14 ‘‘(B) with respect to which the contribution 

15 requirements of paragraph (3), and the eligi16 bility and participation requirements of para17 graph (4), are met. 

18 ‘‘(3) CONTRIBUTIONS REQUIREMENTS.— 

19 ‘‘(A) IN GENERAL.—The requirements of 

20 this paragraph are met if, under the plan— 

21 ‘‘(i) the employer makes matching 

22 contributions on behalf of each employee 

23 who is eligible to participate in the plan 

24 and who is not a highly compensated or 

25 key employee in an amount equal to the 


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1 elective plan contributions of the employee 

2 to the plan to the extent the employee’s 

3 elective plan contributions do not exceed 3 

4 percent of the employee’s compensation, or 

5 ‘‘(ii) the employer is required, without 

6 regard to whether an employee makes any 

7 elective plan contribution, to make a con8 tribution to the plan on behalf of each em9 ployee who is not a highly compensated or 

10 key employee and who is eligible to partici11 pate in the plan in an amount equal to at 

12 least 2 percent of the employee’s com13 pensation. 

14 ‘‘(B) MATCHING CONTRIBUTIONS ON BE15 HALF OF HIGHLY COMPENSATED AND KEY EM16 PLOYEES.—The requirements of subparagraph 

17 (A)(i) shall not be treated as met if, under the 

18 plan, the rate of matching contribution with re19 spect to any elective plan contribution of a 

20 highly compensated or key employee at any rate 

21 of contribution is greater than that with respect 

22 to an employee who is not a highly compensated 

23 or key employee. 

24 ‘‘(C) SPECIAL RULES.— 


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1 ‘‘(i) TIME FOR MAKING CONTRIBU2 TIONS.—An employer shall not be treated 

3 as failing to meet the requirements of this 

4 paragraph with respect to any elective plan 

5 contributions of any compensation, or em6 ployer contributions required under this 

7 paragraph with respect to any compensa8 tion, if such contributions are made no 

9 later than the 15th day of the month fol10 lowing the last day of the calendar quarter 

11 which includes the date of payment of the 

12 compensation. 

13 ‘‘(ii) FORM OF CONTRIBUTIONS.—Em14 ployer contributions required under this 

15 paragraph may be made either to the plan 

16 to provide benefits offered under the plan 

17 or to any person as payment for providing 

18 benefits offered under the plan. 

19 ‘‘(iii) ADDITIONAL CONTRIBUTIONS.— 

20 Subject to subparagraph (B), nothing in 

21 this paragraph shall be treated as prohib22 iting an employer from making contribu23 tions to the plan in addition to contribu24 tions required under subparagraph (A). 


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1 ‘‘(D) DEFINITIONS.—For purposes of this 

2 paragraph— 

3 ‘‘(i) ELECTIVE PLAN CONTRIBU4 TION.—The term ‘elective plan contribu5 tion’ means any amount which is contrib6 uted at the election of the employee and 

7 which is not includible in gross income by 

8 reason of this section. 

9 ‘‘(ii) HIGHLY COMPENSATED EM10 PLOYEE.—The term ‘highly compensated 

11 employee’ has the meaning given such term 

12 by section 414(q). 

13 ‘‘(iii) KEY EMPLOYEE.—The term 

14 ‘key employee’ has the meaning given such 

15 term by section 416(i). 

16 ‘‘(4) MINIMUM ELIGIBILITY AND PARTICIPA17 TION REQUIREMENTS.— 

18 ‘‘(A) IN GENERAL.—The requirements of 

19 this paragraph shall be treated as met with re20 spect to any year if, under the plan— 

21 ‘‘(i) all employees who had at least 

22 1,000 hours of service for the preceding 

23 plan year are eligible to participate, and 

24 ‘‘(ii) each employee eligible to partici25 pate in the plan may, subject to terms and 


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1 conditions applicable to all participants, 

2 elect any benefit available under the plan. 

3 ‘‘(B) CERTAIN EMPLOYEES MAY BE EX4 CLUDED.—For purposes of subparagraph 

5 (A)(i), an employer may elect to exclude under 

6 the plan employees— 

7 ‘‘(i) who have less than 1 year of serv8 ice with the employer as of any day during 

9 the plan year, 

10 ‘‘(ii) who have not attained the age of 

11 21 before the close of a plan year, 

12 ‘‘(iii) who are covered under an agree13 ment which the Secretary of Labor finds to 

14 be a collective bargaining agreement if 

15 there is evidence that the benefits covered 

16 under the cafeteria plan were the subject 

17 of good faith bargaining between employee 

18 representatives and the employer, or 

19 ‘‘(iv) who are described in section 

20 410(b)(3)(C) (relating to nonresident 

21 aliens working outside the United States). 

22 A plan may provide a shorter period of service 

23 or younger age for purposes of clause (i) or (ii). 

24 ‘‘(5) ELIGIBLE EMPLOYER.—For purposes of 

25 this subsection— 


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1 ‘‘(A) IN GENERAL.—The term ‘eligible em2 ployer’ means, with respect to any year, any 

3 employer if such employer employed an average 

4 of 100 or fewer employees on business days 

5 during either of the 2 preceding years. For pur6 poses of this subparagraph, a year may only be 

7 taken into account if the employer was in exist8 ence throughout the year. 

9 ‘‘(B) EMPLOYERS NOT IN EXISTENCE DUR10 ING PRECEDING YEAR.—If an employer was not 

11 in existence throughout the preceding year, the 

12 determination under subparagraph (A) shall be 

13 based on the average number of employees that 

14 it is reasonably expected such employer will em15 ploy on business days in the current year. 

16 ‘‘(C) GROWING EMPLOYERS RETAIN

17 TREATMENT AS SMALL EMPLOYER.—If— 

18 ‘‘(i) an employer was an eligible em19 ployer for any year (a ‘qualified year’), and 

20 ‘‘(ii) such employer establishes a sim21 ple cafeteria plan for its employees for 

22 such year, then, notwithstanding the fact 

23 the employer fails to meet the require24 ments of subparagraph (A) for any subse25 quent year, such employer shall be treated 


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1 as an eligible employer for such subsequent 

2 year with respect to employees (whether or 

3 not employees during a qualified year) of 

4 any trade or business which was covered 

5 by the plan during any qualified year. This 

6 subparagraph shall cease to apply if the 

7 employer employs an average of 200 more 

8 employees on business days during any 

9 year preceding any such subsequent year. 

10 ‘‘(D) SPECIAL RULES.— 

11 ‘‘(i) PREDECESSORS.—Any reference 

12 in this paragraph to an employer shall in13 clude a reference to any predecessor of 

14 such employer. 

15 ‘‘(ii) AGGREGATION RULES.—All per16 sons treated as a single employer under 

17 subsection (a) or (b) of section 52, or sub18 section (n) or (o) of section 414, shall be 

19 treated as one person. 

20 ‘‘(6) APPLICABLE NONDISCRIMINATION RE21 QUIREMENT.—For purposes of this subsection, the 

22 term ‘applicable nondiscrimination requirement’ 

23 means any requirement under subsection (b) of this 

24 section, section 79(d), section 105(h), or paragraph 

25 (2), (3), (4), or (8) of section 129(d). 


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1 ‘‘(7) COMPENSATION.—The term ‘compensa2 tion’ has the meaning given such term by section 

3 414(s).’’. 

4 (b) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to years beginning after December 

6 31, 2006. 

7 SEC. 112. MODIFICATIONS OF RULES APPLICABLE TO CAFE8 TERIA PLANS. 

9 (a) APPLICATION TO SELF-EMPLOYED INDIVID10 UALS.— 

11 (1) IN GENERAL.—Section 125(d) of the Inter12 nal Revenue Code of 1986 (defining cafeteria plan) 

13 is amended by adding at the end the following new 

14 paragraph: 

15 ‘‘(3) EMPLOYEE TO INCLUDE SELF-EM16 PLOYED.— 

17 ‘‘(A) IN GENERAL.—The term ‘employee’ 

18 includes an individual who is an employee with19 in the meaning of section 401(c)(1) (relating to 

20 self-employed individuals). 

21 ‘‘(B) LIMITATION.—The amount which 

22 may be excluded under subsection (a) with re23 spect to a participant in a cafeteria plan by rea24 son of being an employee under subparagraph 

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1 come (within the meaning of section 401(c)) de2 rived from the trade or business with respect to 

3 which the cafeteria plan is established.’’. 

4 (2) APPLICATION TO BENEFITS WHICH MAY BE

5 PROVIDED UNDER CAFETERIA PLAN.— 

6 (A) GROUP-TERM LIFE INSURANCE.—Sec7 tion 79 of such Code (relating to group-term 

8 life insurance provided to employees) is amend9 ed by adding at the end the following new sub10 section: 

11 ‘‘(f) EMPLOYEE INCLUDES SELF-EMPLOYED.— 

12 ‘‘(1) IN GENERAL.—For purposes of this sec13 tion, the term ‘employee’ includes an individual who 

14 is an employee within the meaning of section 

15 401(c)(1) (relating to self-employed individuals). 

16 ‘‘(2) LIMITATION.—The amount which may be 

17 excluded under the exceptions contained in sub18 section (a) or (b) with respect to an individual treat19 ed as an employee by reason of paragraph (1) shall 

20 not exceed the employee’s earned income (within the 

21 meaning of section 401(c)) derived from the trade or 

22 business with respect to which the individual is so 

23 treated.’’. 


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1 (B) ACCIDENT AND HEALTH PLANS.—Sec2 tion 105(g) of such Code is amended to read as 

3 follows: 

4 ‘‘(g) EMPLOYEE INCLUDES SELF-EMPLOYED.— 

5 ‘‘(1) IN GENERAL.—For purposes of this sec6 tion, the term ‘employee’ includes an individual who 

7 is an employee within the meaning of section 

8 401(c)(1) (relating to self-employed individuals). 

9 ‘‘(2) LIMITATION.—The amount which may be 

10 excluded under this section by reason of subsection 

11 (b) or (c) with respect to an individual treated as an 

12 employee by reason of paragraph (1) shall not ex13 ceed the employee’s earned income (within the mean14 ing of section 401(c)) derived from the trade or 

15 business with respect to which the accident or health 

16 insurance was established.’’. 

17 (C) CONTRIBUTIONS BY EMPLOYERS TO

18 ACCIDENT AND HEALTH PLANS.— 

19 (i) IN GENERAL.—Section 106 of such 

20 Code, as amended by subsection (b), is 

21 amended by adding after subsection (b) the 

22 following new subsection: 

23 ‘‘(c) EMPLOYER TO INCLUDE SELF-EMPLOYED.— 

24 ‘‘(1) IN GENERAL.—For purposes of this sec25 tion, the term ‘employee’ includes an individual who 


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1 is an employee within the meaning of section 

2 401(c)(1) (relating to self-employed individuals). 

3 ‘‘(2) LIMITATION.—The amount which may be 

4 excluded under subsection (a) with respect to an in5 dividual treated as an employee by reason of para6 graph (1) shall not exceed the employee’s earned in7 come (within the meaning of section 401(c)) derived 

8 from the trade or business with respect to which the 

9 accident or health insurance was established.’’. 

10 (ii) CLARIFICATION OF LIMITATIONS

11 ON OTHER COVERAGE.—The first sentence 

12 of section 162(l)(2)(B) is amended to read 

13 as follows: ‘‘Paragraph (1) shall not apply 

14 to any taxpayer for any calendar month for 

15 which the taxpayer participates in any sub16 sidized health plan maintained by any em17 ployer (other than an employer described 

18 in section 401(c)(4)) of the taxpayer or the 

19 spouse of the taxpayer.’’. 

20 (b) LONG-TERM CARE INSURANCE PERMITTED TO

21 BE OFFERED UNDER CAFETERIA PLANS AND FLEXIBLE

22 SPENDING ARRANGEMENTS.— 

23 (1) CAFETERIA PLANS.—The last sentence of 

24 section 125(f) of the Internal Revenue Code of 1986 

25 (defining qualified benefits) is amended to read as 


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1 follows: ‘‘Such term shall include the payment of 

2 premiums for any qualified long-term care insurance 

3 contract (as defined in section 7702B) to the extent 

4 the amount of such payment does not exceed the eli5 gible long-term care premiums (as defined in section 

6 213(d)(10)) for such contract.’’. 

7 (2) FLEXIBLE SPENDING ARRANGEMENTS.— 

8 Section 106 of such Code (relating to contributions 

9 by employer to accident and health plans) is amend10 ed by striking subsection (c). 

11 (c) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to taxable years beginning after 

13 December 31, 2006. 

14 SEC. 113. MODIFICATION OF RULES APPLICABLE TO FLEXI15 BLE SPENDING ARRANGEMENTS. 

16 (a) IN GENERAL.—Section 125 of the Internal Rev17 enue Code of 1986, as amended by section 111, is amend18 ed by redesignating subsections (i) and (j) as subsections 

19 (j) and (k), respectively, and by inserting after subsection 

20 (h) the following new subsection: 

21 ‘‘(i) SPECIAL RULES APPLICABLE TO FLEXIBLE

22 SPENDING ARRANGEMENTS.— 

23 ‘‘(1) IN GENERAL.—For purposes of this title, 

24 a plan or other arrangement shall not fail to be 


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1 treated as a flexible spending or similar arrangement 

2 solely because under the plan or arrangement— 

3 ‘‘(A) the amount of the reimbursement for 

4 covered expenses at any time may not exceed 

5 the balance in the participant’s account for the 

6 covered expenses as of such time, 

7 ‘‘(B) except as provided in paragraph 

8 (4)(A)(ii), a participant may elect at any time 

9 specified by the plan or arrangement to make 

10 or modify any election regarding the covered 

11 benefits, or the level of covered benefits, of the 

12 participant under the plan, and 

13 ‘‘(C) a participant is permitted access to 

14 any unused balance in the participant’s ac15 counts under such plan or arrangement in the 

16 manner provided under paragraph (2) or (3). 

17 ‘‘(2) CARRYOVERS AND ROLLOVERS OF UNUSED

18 BENEFITS IN HEALTH AND DEPENDENT CARE AR19 RANGEMENTS.— 

20 ‘‘(A) IN GENERAL.—A plan or arrange21 ment may permit a participant in a health flexi22 ble spending arrangement or dependent care 

23 flexible spending arrangement to elect— 

24 ‘‘(i) to carry forward any aggregate 

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1 counts under such arrangement as of the 

2 close of any year to the succeeding year, or 

3 ‘‘(ii) to have such balance transferred 

4 to a plan described in subparagraph (E). 

5 Such carryforward or transfer shall be treated 

6 as having occurred within 30 days of the close 

7 of the year. 

8 ‘‘(B) DOLLAR LIMIT ON

9 CARRYFORWARDS.— 

10 ‘‘(i) IN GENERAL.—The amount which 

11 a participant may elect to carry forward 

12 under subparagraph (A)(i) from any year 

13 shall not exceed $500. For purposes of this 

14 paragraph, all plans and arrangements 

15 maintained by an employer or any related 

16 person shall be treated as 1 plan. 

17 ‘‘(ii) COST-OF-LIVING ADJUSTMENT.— 

18 In the case of any taxable year beginning 

19 in a calendar year after 2007, the $500 

20 amount under clause (i) shall be increased 

21 by an amount equal to— 

22 ‘‘(I) $500, multiplied by 

23 ‘‘(II) the cost-of-living adjust24 ment determined under section 1(f)(3) 

25 for such calendar year, determined by 


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1 substituting ‘2006’ for ‘1992’ in sub2 paragraph (B) thereof. 

3 If any dollar amount as increased under 

4 this clause is not a multiple of $100, such 

5 amount shall be rounded to the next lowest 

6 multiple of $100. 

7 ‘‘(C) EXCLUSION FROM GROSS INCOME.— 

8 No amount shall be required to be included in 

9 gross income under this chapter by reason of 

10 any carryforward or transfer under this para11 graph. 

12 ‘‘(D) COORDINATION WITH LIMITS.— 

13 ‘‘(i) CARRYFORWARDS.—The max14 imum amount which may be contributed to 

15 a health flexible spending arrangement or 

16 dependent care flexible spending arrange17 ment for any year to which an unused 

18 amount is carried under this paragraph 

19 shall be reduced by such amount. 

20 ‘‘(ii) ROLLOVERS.—Any amount 

21 transferred under subparagraph (A)(ii) 

22 shall be treated as an eligible rollover 

23 under section 219, 223(f)(5), 401(k), 

24 403(b), or 457, whichever is applicable, ex25 cept that— 


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1 ‘‘(I) the amount of the contribu2 tions which a participant may make to 

3 the plan under any such section for 

4 the taxable year including the transfer 

5 shall be reduced by the amount trans6 ferred, and 

7 ‘‘(II) in the case of a transfer to 

8 a plan described in clause (ii) or (iii) 

9 of subparagraph (E), the transferred 

10 amounts shall be treated as elective 

11 deferrals for such taxable year. 

12 ‘‘(E) PLANS.—A plan is described in this 

13 subparagraph if it is— 

14 ‘‘(i) an individual retirement plan, 

15 ‘‘(ii) a qualified cash or deferred ar16 rangement described in section 401(k), 

17 ‘‘(iii) a plan under which amounts are 

18 contributed by an individual’s employer for 

19 an annuity contract described in section 

20 403(b), 

21 ‘‘(iv) an eligible deferred compensa22 tion plan described in section 457, or 

23 ‘‘(v) a health savings account de24 scribed in section 223. 

25 ‘‘(3) DISTRIBUTION UPON TERMINATION.— 


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1 ‘‘(A) IN GENERAL.—A plan or arrange2 ment may permit a participant (or any des3 ignated heir of the participant) to receive a 

4 cash payment equal to the aggregate unused ac5 count balances in the plan or arrangement as of 

6 the date the individual is separated (including 

7 by death or disability) from employment with 

8 the employer maintaining the plan or arrange9 ment. 

10 ‘‘(B) INCLUSION IN INCOME.—Any pay11 ment under subparagraph (A) shall be includ12 ible in gross income for the taxable year in 

13 which such payment is distributed to the em14 ployee. 

15 ‘‘(4) TERMS RELATING TO FLEXIBLE SPENDING

16 ARRANGEMENTS.— 

17 ‘‘(A) FLEXIBLE SPENDING ARRANGE18 MENTS.— 

19 ‘‘(i) IN GENERAL.—For purposes of 

20 this subsection, a flexible spending ar21 rangement is a benefit program which pro22 vides employees with coverage under which 

23 specified incurred expenses may be reim24 bursed (subject to reimbursement maxi25 mums and other reasonable conditions). 


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1 ‘‘(ii) ELECTIONS REQUIRED.—A plan 

2 or arrangement shall not be treated as a 

3 flexible spending arrangement unless a 

4 participant may at least 4 times during 

5 any year make or modify any election re6 garding covered benefits or the level of cov7 ered benefits. 

8 ‘‘(B) HEALTH AND DEPENDENT CARE AR9 RANGEMENTS.—The terms ‘health flexible 

10 spending arrangement’ and ‘dependent care 

11 flexible spending arrangement’ means any flexi12 ble spending arrangement (or portion thereof) 

13 which provides payments for expenses incurred 

14 for medical care (as defined in section 213(d)) 

15 or dependent care (within the meaning of sec16 tion 129), respectively.’’. 

17 (b) CONFORMING AMENDMENT.— 

18 (1) The heading for section 125 of the Internal 

19 Revenue Code of 1986 is amended by inserting 

20 ‘‘AND FLEXIBLE SPENDING ARRANGEMENTS’’ 

21 after ‘‘PLANS’’. 

22 (2) The item relating to section 125 of such 

23 Code in the table of sections for part III of sub24 chapter B of chapter 1 is amended by inserting ‘‘and 

25 flexible spending arrangements’’ after ‘‘plans’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to years beginning after December 

3 31, 2006. 

4 Subtitle C—Incentives for 

5 Insurance Companies 

6 SEC. 121. SPECIAL DEDUCTION FOR CERTAIN HEALTH IN7 SURANCE COMPANIES IN THE SMALL GROUP 

8 MARKET. 

9 (a) IN GENERAL.—Section 833 of the Internal Rev10 enue Code of 1986 is amended to read as follows: 

11 ‘‘SEC. 833. SPECIAL DEDUCTION FOR HEALTH INSURANCE 

12 RELATED TO SMALL GROUP COVERAGE AND 

13 SMALL BUSINESS HEALTH PLANS. 

14 ‘‘(a) GENERAL RULE.—In the case of any insurance 

15 company other than a life insurance company, the deduc16 tion determined under subsection (b) for any taxable year 

17 shall be allowed. 

18 ‘‘(b) AMOUNT OF DEDUCTION.— 

19 ‘‘(1) IN GENERAL.—Except as provided in para20 graph (2), the deduction determined under this sub21 section for any taxable year is the excess (if any) 

22 of— 

23 ‘‘(A) 50 percent of the claims incurred 

24 during the taxable year and liabilities incurred 


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1 during the taxable year under cost-plus con2 tracts, over 

3 ‘‘(B) the adjusted surplus as of the begin4 ning of the taxable year. 

5 ‘‘(2) LIMITATION.—The deduction determined 

6 under paragraph (1) for any taxable year shall not 

7 exceed taxable income for such taxable year (deter8 mined without regard to such deduction). 

9 ‘‘(3) ADJUSTED SURPLUS.—For purposes of 

10 this subsection— 

11 ‘‘(A) IN GENERAL.—The adjusted surplus 

12 as of the beginning of any taxable year is an 

13 amount equal to the adjusted surplus as of the 

14 beginning of the preceding taxable year— 

15 ‘‘(i) increased by the amount of any 

16 adjusted taxable income for such preceding 

17 taxable year, or 

18 ‘‘(ii) decreased by the amount of any 

19 adjusted net operating loss for such pre20 ceding taxable year. 

21 ‘‘(B) SPECIAL RULE.—The adjusted sur22 plus as of the beginning of the organization’s 

23 1st taxable year beginning after December 31, 

24 2006, shall be its surplus as of such time. For 

25 purposes of the preceding sentence, the term 


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1 ‘surplus’ means the excess of the total assets 

2 over the total liabilities as shown on the annual 

3 statement. 

4 ‘‘(C) ADJUSTED TAXABLE INCOME.—The 

5 term ‘adjusted taxable income’ means taxable 

6 income determined— 

7 ‘‘(i) without regard to the deduction 

8 determined under this subsection, 

9 ‘‘(ii) without regard to any 

10 carryforward or carryback to such taxable 

11 year, and 

12 ‘‘(iii) by increasing gross income by 

13 an amount equal to the net exempt income 

14 for the taxable year. 

15 ‘‘(D) ADJUSTED NET OPERATING LOSS.— 

16 The term ‘adjusted net operating loss’ means 

17 the net operating loss for any taxable year de18 termined with the adjustments set forth in sub19 paragraph (C). 

20 ‘‘(E) NET EXEMPT INCOME.—The term 

21 ‘net exempt income’ means— 

22 ‘‘(i) any tax-exempt interest received 

23 or accrued during the taxable year, re24 duced by any amount (not otherwise de25 ductible) which would have been allowable 


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1 as a deduction for the taxable year if such 

2 interest were not tax-exempt, and 

3 ‘‘(ii) the aggregate amount allowed as 

4 a deduction for the taxable year under sec5 tions 243, 244, and 245. 

6 The amount determined under clause (ii) shall 

7 be reduced by the amount of any decrease in 

8 deductions allowable for the taxable year by 

9 reason of section 832(b)(5)(B) to the extent 

10 such decrease is attributable to deductions 

11 under sections 243, 244, and 245. 

12 ‘‘(4) ONLY CERTAIN HEALTH-RELATED ITEMS

13 TAKEN INTO ACCOUNT.— 

14 ‘‘(A) IN GENERAL.—Any determination 

15 under this subsection shall be made by only 

16 taking into account items attributable to the 

17 qualified health-related business of the tax18 payer. 

19 ‘‘(B) QUALIFIED HEALTH RELATED BUSI20 NESS.—For purposes of this paragraph, the 

21 term ‘qualified health-related business’ means 

22 health-related business which is attributable 

23 to— 


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1 ‘‘(i) the small group market (as de2 fined under section 2791(e)(6) of the Pub3 lic Health Service Act), and 

4 ‘‘(ii) small business health plans. 

5 ‘‘(C) SMALL BUSINESS HEALTH PLAN.— 

6 ‘‘(i) IN GENERAL.—For purposes of 

7 this section, the term ‘small business 

8 health plan’ means a group health plan 

9 whose sponsor is (or is deemed under this 

10 section to be) described in clause (ii). 

11 ‘‘(ii) SPONSORSHIP.—The sponsor of 

12 a group health plan is described in this 

13 clause if such sponsor— 

14 ‘‘(I) is organized and maintained 

15 in good faith, with a constitution and 

16 bylaws specifically stating its purpose 

17 and providing for periodic meetings on 

18 at least an annual basis, as a bona 

19 fide trade association, a bona fide in20 dustry association (including a rural 

21 electric cooperative association or a 

22 rural telephone cooperative associa23 tion), a bona fide professional associa24 tion, a bona fide chamber of com25 merce (or similar bona fide business 


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1 association, including a corporation or 

2 similar organization that operates on 

3 a cooperative basis (within the mean4 ing of section 1381)), or a bona fide 

5 labor union, for substantial purposes 

6 other than that of obtaining or pro7 viding medical care, 

8 ‘‘(II) is established as a perma9 nent entity which receives the active 

10 support of its members and requires 

11 for membership payment on a periodic 

12 basis of dues or payments necessary 

13 to maintain eligibility for membership 

14 in the sponsor, and 

15 ‘‘(III) does not condition mem16 bership, such dues or payments, or 

17 coverage under the plan on the basis 

18 of health status-related factors with 

19 respect to the employees of its mem20 bers (or affiliated members), or the 

21 dependents of such employees, and 

22 does not condition such dues or pay23 ments on the basis of group health 

24 plan participation. 


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1 Any sponsor consisting of an association of 

2 entities which meet the requirements of 

3 subclause (I), (II), and (III) shall be 

4 deemed to be a sponsor described in this 

5 clause.’’. 

6 (b) CONFORMING AMENDMENT.—The table of sec7 tion for part II of subchapter L of chapter 1 of the Inter8 nal Revenue Code of 1986 is amended by striking the item 

9 relating to section 833 and inserting the following: 

‘‘Sec. 833. Special deduction for health insurance related to small group 

coverage.’’. 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to taxable years beginning after 

12 December 31, 2006. 

13 SEC. 122. CREDIT FOR LICENSING COSTS OF CERTAIN 

14 HEALTH INSURANCE COMPANIES. 

15 (a) IN GENERAL.—Subpart D of part IV of sub16 chapter A of chapter 1 of the Internal Revenue Code of 

17 1986 (relating to business related credits) is amended by 

18 adding at the end the following new section: 

19 ‘‘SEC. 45N. HEALTH INSURANCE LICENSING CREDIT. 

20 ‘‘(a) DETERMINATION OF AMOUNT.—For purposes of 

21 section 38, the health insurance licensing credit deter22 mined under this section with respect to any eligible entity 

23 for any taxable year is an amount equal to the qualified 


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1 licensing costs paid or incurred by such eligible entity in 

2 each State during the taxable year. 

3 ‘‘(b) LIMITATION.—The qualified licensing costs 

4 taken into account under subsection (a) with respect to 

5 any State for any taxable year shall not exceed the lesser 

6 of— 

7 ‘‘(1) 50 percent of qualified licensing costs paid 

8 or incurred by such eligible entity with respect to 

9 such State during the taxable year, or 

10 ‘‘(2) $10,000. 

11 ‘‘(c) ELIGIBLE ENTITY.—For purposes of this sec12 tion, the term ‘eligible entity’ means an insurance com13 pany (as defined in section 816(a)) other than life which 

14 conducts qualified health-related business during the tax15 able year in the State in which the qualifying licensing 

16 costs are incurred. 

17 ‘‘(d) QUALIFIED LICENSING COSTS.—For purposes 

18 of this section, the term ‘qualified licensing costs’ means 

19 costs in connection with satisfying State licensing require20 ments related to conducting a qualified health-related 

21 business in such State. 

22 ‘‘(e) QUALIFIED HEALTH-RELATED BUSINESS.—For 

23 purposes of this section, the term ‘qualified health-related 

24 business’ has the meaning given such term under section 

25 833(b)(4). 


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1 ‘‘(f) REGULATIONS.—Not later than 6 months after 

2 the date of the enactment of this section, the Secretary 

3 shall promulgate regulations on allocating qualified licens4 ing costs between a qualified health-related business and 

5 other businesses of an eligible entity. 

6 ‘‘(g) TERMINATION.—This section shall not apply to 

7 costs paid or incurred in taxable years beginning after De8 cember 31, 2011.’’. 

9 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec10 tion 38(b) of the Internal Revenue Code of 1986 (relating 

11 to current year business credit) is amended by striking 

12 ‘‘and’’ at the end of paragraph (28), by striking the period 

13 at the end of paragraph (29) and inserting ‘‘, plus’’, and 

14 by adding at the end the following new paragraph: 

15 ‘‘(30) the health insurance licensing credit de16 termined under section 45N(a).’’. 

17 (c) CLERICAL AMENDMENT.—The table of sections 

18 for subpart D of part IV of subchapter A of chapter 1 

19 of the Internal Revenue Code of 1986 is amended by add20 ing at the end the following new item: 

‘‘Sec. 45N. Health insurance licensing credit.’’. 

21 (d) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to taxable years beginning after 

23 December 31, 2006. 


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1 TITLE II—SMALL BUSINESS 

2 HEALTH INSURANCE INFOR3 MATION PILOT PROGRAM 

4 SEC. 201. PURPOSE. 

5 The purpose of this title is to establish a 4-year pilot 

6 program to provide information and educational materials 

7 to small business concerns regarding health insurance op8 tions, including coverage options within the small group 

9 market. 

10 SEC. 202. DEFINITIONS. 

11 In this title: 

12 (1) ADMINISTRATOR.—The term ‘‘Adminis13 trator’’ means the Administrator of the Small Busi14 ness Administration, acting through the Associate 

15 Administrator for Small Business Development Cen16 ters. 

17 (2) ASSOCIATION.—The term ‘‘association’’ 

18 means an association established under section 

19 21(a)(3)(A) of the Small Business Act (15 U.S.C. 

20 648(a)(3)(A)) representing a majority of small busi21 ness development centers. 

22 (3) PARTICIPATING SMALL BUSINESS DEVELOP23 MENT CENTER.—The term ‘‘participating small 

24 business development center’’ means a small busiVerDate Aug 31 2005 03:53 Mar 28, 2006 Jkt 049200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\S2457.IS S2457

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1 ness development center described in section 21 of 

2 the Small Business Act (15 U.S.C. 648) that— 

3 (A) is certified under section 21(k)(2) of 

4 the Small Business Act (15 U.S.C. 648(k)(2)); 

5 and 

6 (B) receives a grant under the pilot pro7 gram. 

8 (4) PILOT PROGRAM.—The term ‘‘pilot pro9 gram’’ means the small business health insurance in10 formation pilot program established under this title. 

11 (5) SMALL BUSINESS CONCERN.—The term 

12 ‘‘small business concern’’ has the same meaning as 

13 in section 3 of the Small Business Act (15 U.S.C. 

14 632). 

15 (6) STATE.—The term ‘‘State’’ means each of 

16 the several States, the District of Columbia, the 

17 Commonwealth of Puerto Rico, the Virgin Islands, 

18 American Samoa, and Guam. 

19 SEC. 203. SMALL BUSINESS HEALTH INSURANCE INFORMA20 TION PILOT PROGRAM. 

21 (a) AUTHORITY.—The Administrator shall establish 

22 a pilot program to make grants to small business develop23 ment centers to provide information and educational mate24 rials regarding health insurance options, including covVerDate Aug 31 2005 03:53 Mar 28, 2006 Jkt 049200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\S2457.IS S2457

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1 erage options within the small group market, to small 

2 business concerns. 

3 (b) APPLICATIONS.— 

4 (1) POSTING OF INFORMATION.—Not later than 

5 90 days after the date of enactment of this Act, the 

6 Administrator shall post on the website of the Small 

7 Business Administration and publish in the Federal 

8 Register a guidance document describing— 

9 (A) the requirements of an application for 

10 a grant under the pilot program; and 

11 (B) the types of informational and edu12 cational materials regarding health insurance 

13 options to be created under the pilot program, 

14 including by referencing such materials devel15 oped by the Healthcare Leadership Council. 

16 (2) SUBMISSION.—A small business develop17 ment center desiring a grant under the pilot pro18 gram shall submit an application at such time, in 

19 such manner, and accompanied by such information 

20 as the Administrator may reasonably require. 

21 (c) SELECTION OF PARTICIPATING SBDCS.— 

22 (1) IN GENERAL.—The Administrator shall se23 lect not more than 20 small business development 

24 centers to receive a grant under the pilot program. 


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1 (2) SELECTION OF PROGRAMS.—In selecting 

2 small business development centers under paragraph 

3 (1), the Administrator shall not select— 

4 (A) more than 2 programs from each of 

5 the groups of States described in paragraph 

6 (3); and 

7 (B) more than 1 program in any State. 

8 (3) GROUPINGS.—The groups of States de9 scribed in this paragraph are the following: 

10 (A) GROUP 1.—Group 1 shall consist of 

11 Maine, Massachusetts, New Hampshire, Con12 necticut, Vermont, and Rhode Island. 

13 (B) GROUP 2.—Group 2 shall consist of 

14 New York, New Jersey, Puerto Rico, and the 

15 Virgin Islands. 

16 (C) GROUP 3.—Group 3 shall consist of 

17 Pennsylvania, Maryland, West Virginia, Vir18 ginia, the District of Columbia, and Delaware. 

19 (D) GROUP 4.—Group 4 shall consist of 

20 Georgia, Alabama, North Carolina, South Caro21 lina, Mississippi, Florida, Kentucky, and Ten22 nessee. 

23 (E) GROUP 5.—Group 5 shall consist of Il24 linois, Ohio, Michigan, Indiana, Wisconsin, and 

25 Minnesota. 


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1 (F) GROUP 6.—Group 6 shall consist of 

2 Texas, New Mexico, Arkansas, Oklahoma, and 

3 Louisiana. 

4 (G) GROUP 7.—Group 7 shall consist of 

5 Missouri, Iowa, Nebraska, and Kansas. 

6 (H) GROUP 8.—Group 8 shall consist of 

7 Colorado, Wyoming, North Dakota, South Da8 kota, Montana, and Utah. 

9 (I) GROUP 9.—Group 9 shall consist of 

10 California, Guam, American Samoa, Hawaii, 

11 Nevada, and Arizona. 

12 (J) GROUP 10.—Group 10 shall consist of 

13 Washington, Alaska, Idaho, and Oregon. 

14 (4) DEADLINE FOR SELECTION.—The Adminis15 trator shall make selections under this subsection 

16 not later than 6 months after the later of the date 

17 on which the information described in subsection 

18 (b)(1) is posted on the website of the Small Business 

19 Administration and the date on which the informa20 tion described in subsection (b)(1) is published in 

21 the Federal Register. 

22 (d) USE OF FUNDS.— 

23 (1) IN GENERAL.—A participating small busi24 ness development center shall use funds provided 

25 under the pilot program to— 


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1 (A) create and distribute informational 

2 materials; and 

3 (B) conduct training and educational ac4 tivities. 

5 (2) CONTENT OF MATERIALS.—In creating ma6 terials under the pilot program, a participating small 

7 business development center shall evaluate and in8 corporate relevant portions of existing informational 

9 materials regarding health insurance options, such 

10 as the materials created by the Healthcare Leader11 ship Council. 

12 (e) GRANT AMOUNTS.—Each participating small 

13 business development center program shall receive a grant 

14 in an amount equal to— 

15 (1) not less than $150,000 per fiscal year; and 

16 (2) not more than $300,000 per fiscal year. 

17 (f) MATCHING REQUIREMENT.—Subparagraphs (A) 

18 and (B) of section 21(a)(4) of the Small Business Act (15 

19 U.S.C. 648(a)(4)) shall apply to assistance made available 

20 under the pilot program. 

21 SEC. 204. REPORTS. 

22 Each participating small business development center 

23 shall transmit to the Administrator and the Chief Counsel 

24 for Advocacy of the Small Business Administration, as the 


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1 Administrator may direct, a quarterly report that in2 cludes— 

3 (1) a summary of the information and edu4 cational materials regarding health insurance op5 tions provided by the participating small business 

6 development center under the pilot program; and 

7 (2) the number of small business concerns as8 sisted under the pilot program. 

9 SEC. 205. AUTHORIZATION OF APPROPRIATIONS. 

10 (a) IN GENERAL.—There are authorized to be appro11 priated to carry out this title— 

12 (1) $5,000,000 for the first fiscal year begin13 ning after the date of enactment of this Act; and 

14 (2) $5,000,000 for each of the 3 fiscal years 

15 following the fiscal year described in paragraph (1). 

16 (b) LIMITATION ON USE OF OTHER FUNDS.—The 

17 Administrator may carry out the pilot program only with 

18 amounts appropriated in advance specifically to carry out 

19 this title. 

Æ 


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