```

[House Report 114-655]
[From the U.S. Government Publishing Office]

114th Congress   }                                     {        Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                     {       114-655

======================================================================
 
                  STUDENT WORKER EXEMPTION ACT OF 2016

                                _______
                                

  July 5, 2016.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Brady of Texas, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 210]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 210) to amend the Internal Revenue Code of 1986 to 
exempt student workers for purposes of determining a higher 
education institution's employer health care shared 
responsibility, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.

                                CONTENTS

                                                                   Page
 I. SUMMARY AND BACKGROUND............................................2
II. EXPLANATION OF THE BILL...........................................3
        A. Student Workers Exempted from Determination of Higher 
            Education Institution's Employer Health Care Shared 
            Responsibility (sec. 2 of the bill and sec. 4980H of 
            the Code)............................................     3
III.VOTES OF THE COMMITTEE............................................6

IV. BUDGET EFFECTS OF THE BILL........................................6
        A. Committee Estimate of Budgetary Effects...............     6
        B. Statement Regarding New Budget Authority and Tax 
            Expenditures Budget Authority........................     6
        C. Cost Estimate Prepared by the Congressional Budget 
            Office...............................................     7
 V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE........8
        A. Committee Oversight Findings and Recommendations......     8
        B. Statement of General Performance Goals and Objectives.     8
        C. Information Relating to Unfunded Mandates.............     8
        D. Applicability of House Rule XXI 5(b)..................     8
        E. Tax Complexity Analysis...............................     8
        F. Congressional Earmarks, Limited Tax Benefits, and 
            Limited Tariff Benefits..............................     9
        G. Duplication of Federal Programs.......................     9
        H. Disclosure of Directed Rule Makings...................     9
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED.............9

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Student Worker Exemption Act of 
2016''.

SEC. 2. STUDENT WORKERS EXEMPTED FROM DETERMINATION OF HIGHER EDUCATION 
                    INSTITUTION'S EMPLOYER HEALTH CARE SHARED 
                    RESPONSIBILITY.

  (a) In General.--Subsection (c) of section 4980H of the Internal 
Revenue Code of 1986 is amended by redesignating paragraphs (5), (6), 
and (7) as paragraphs (6), (7), and (8), respectively, and by inserting 
after paragraph (4) the following new paragraph:
          ``(5) Exception for student workers.--
                  ``(A) In general.--Services rendered as a student 
                worker to an eligible educational institution (as 
                defined in section 25A(f)(2)) shall not be taken into 
                account under this section as service provided by an 
                employee.
                  ``(B) Student worker.--For purposes of this 
                paragraph, the term `student worker' means, with 
                respect to any eligible educational institution (as so 
                defined), any individual who--
                          ``(i) is employed by such institution, and
                          ``(ii) is a student enrolled at the 
                        institution and is carrying a full-time 
                        academic workload, as determined by the 
                        institution, under a standard applicable to all 
                        students enrolled in a particular educational 
                        program.''.
  (b) Effective Date.--The amendments made by this section shall apply 
to months beginning after December 31, 2015.

                       I. SUMMARY AND BACKGROUND

                         A. Purpose and Summary

    The bill, H.R. 210, as reported from the Committee on Ways 
and Means, exempts the hours worked by qualified student 
workers from counting towards the thresholds for the Employer 
Mandate under the Affordable Care Act (ACA) for an institution 
of higher education.

                 B. Background and Need for Legislation

    The ACA mandates employers that employ more than 50 full-
time equivalent workers (FTEs) to offer health care coverage to 
their workers or pay one of two penalties beginning in 2014. 
Full-time workers for the purposes of this employer mandate are 
defined as those who work at least 30 hours per week.
    Guidance provided by the Treasury Department omitted 
service performed by students under Federal or State-sponsored 
work-study programs from counting in determining whether they 
are full-time employees for purposes of the mandate. However, 
this guidance did not extend to those students otherwise 
employed by the school.
    The ACA's employer mandate was twice delayed by the 
Administration, revealing the complexities surrounding its 
implementation. Moreover, in times of record student debt, 
obstacles to providing school-based jobs for students should be 
removed. Student employment is an important way in which 
educational expenses can be paid off. The employer mandate 
places a budgetary constraint on colleges and universities that 
could discourage them from hiring student workers on a full-
time basis. This bill will incentivize schools to provide more 
work opportunities for students who are trying to pay their 
educational expenses.

                         C. Legislative History

                               BACKGROUND

    H.R. 210 was introduced on January 8, 2015, and was 
referred to the Committee on Ways and Means.

                            COMMITTEE ACTION

    The Committee on Ways and Means marked up H.R. 210, the 
``Student Worker Exemption Act of 2016,'' on June 15, 2016, and 
ordered the bill, as amended, favorably reported (with a quorum 
being present).

                           COMMITTEE HEARINGS

    The policy issue surrounding employer mandates and their 
impact on access to health care have been discussed at three 
Ways and Means hearings during the 114th Congress:
           Subcommittee on Health Hearing on The 
        Individual and Employer Mandates in the President's 
        Healthcare Law (April 14, 2015);
           Full Committee Hearing on the Tax Treatment 
        of Health Care (April 14, 2016); and
           Subcommittee on Health Member Day Hearing on 
        Tax-Related Proposals to Improve Health Care (May 17, 
        2016).

                      II. EXPLANATION OF THE BILL

  A. Student Workers Exempted from Determination of Higher Education 
Institution's Employer Health Care Shared Responsibility (Sec. 2 of the 
                    Bill and Sec. 4980H of the Code)

                              PRESENT LAW

Employer shared responsibility for health coverage

            In general
    Under the Patient Protection and Affordable Care Act 
(``PPACA''),\1\ as amended by the Health Care and Education 
Reconciliation Act of 2010\2\ (referred to collectively as the 
``Affordable Care Act'' or ``ACA''), an applicable large 
employer may be subject to a tax, called an ``assessable 
payment,'' for a month if one or more of its full-time 
employees is certified to the employer as receiving for the 
month a premium assistance credit for health insurance 
purchased on an American Health Benefit Exchange or reduced 
cost-sharing for the employee's share of expenses covered by 
such health insurance.\3\ As discussed below, whether an 
applicable large employer owes an assessable payment and the 
amount of any assessable payment depend on whether the employer 
offers its full-time employees and their dependents the 
opportunity to enroll in minimum essential coverage under a 
group health plan sponsored by the employer and, if it does, 
whether the coverage offered is affordable and provides minimum 
value.\4\
---------------------------------------------------------------------------
    \1\Pub. L. No. 111-148.
    \2\Pub. L. No. 111-152.
    \3\Sec. 4980H. This is sometimes referred to as the employer shared 
responsibility requirement or employer mandate. An applicable large 
employer is also subject to annual reporting requirements under section 
6056. Premium assistance credits for health insurance purchased on an 
American Health Benefit Exchange are provided under section 36B. 
Reduced cost-sharing for an individual's share of expenses covered by 
such health insurance is provided under section 1402 of PPACA.
    \4\Under the ACA, these rules are effective for months beginning 
after December 31, 2013. However, in Notice 2013-45, 2013-31 I.R.B. 
116, Part III, Q&A-2, the Internal Revenue Service (``IRS'') announced 
that no assessable payments will be assessed for 2014. In addition, in 
2014, the IRS announced that no assessable payments for 2015 will apply 
to applicable large employers that have fewer than 100 full-time 
employees and full-time equivalent employees and meet certain other 
requirements. Section XV.D.6 of the preamble to the final regulations, 
T.D. 9655, 79 Fed. Reg. 8544, 8574-8575, February 12, 2014.
---------------------------------------------------------------------------
            Definitions of full-time employee and applicable large 
                    employer
    For purposes of applying these rules, full-time employee 
means, with respect to any month, an employee who is employed 
on average at least 30 hours of service per week. Hours of 
service are to be determined under regulations, rules, and 
guidance prescribed by the Secretary of the Treasury 
(``Secretary''), in consultation with the Secretary of Labor, 
including rules for employees who are not compensated on an 
hourly basis.
    Applicable large employer generally means, with respect to 
a calendar year, an employer who employed an average of at 
least 50 full-time employees on business days during the 
preceding calendar year.\5\ Solely for purposes of determining 
whether an employer is an applicable large employer (that is, 
whether the employer has at least 50 full-time employees), 
besides the number of full-time employees, the employer must 
include the number of its full-time equivalent employees for a 
month, determined by dividing the aggregate number of hours of 
service for that month (up to a maximum of 120 for any 
employee) of employees who are not full-time employees for the 
month by 120. In addition, in determining whether an employer 
is an applicable large employer, members of the same controlled 
group, group under common control, and affiliated service group 
are treated as a single employer.\6\
---------------------------------------------------------------------------
    \5\Additional rules apply, for example, in the case of an employer 
that was not in existence for the entire preceding calendar year.
    \6\The rules for determining controlled group, group under common 
control, and affiliated service group under section 414(b), (c), (m) 
and (o) apply for this purpose. If the group is an applicable large 
employer under this test, each member of the group is an applicable 
large employer and subject to the employer shared responsibility 
requirement even if the member by itself would not be an applicable 
large employer. In addition, in determining assessable payments (as 
discussed herein), only one 30-employee reduction in full-time 
employees applies to the group and is allocated among the members 
ratably based on the number of full-time employees employed by each 
member.
---------------------------------------------------------------------------
            Assessable payments
    If an applicable large employer does not offer its full-
time employees and their dependents minimum essential coverage 
under an employer-sponsored plan and at least one full-time 
employee is so certified to the employer, the employer may be 
subject to an assessable payment of $2,160 (for 2016)\7\ 
(divided by 12 and applied on a monthly basis) multiplied by 
the number of its full-time employees in excess of 30, 
regardless of the number of full-time employees so certified. 
For example, in 2016, Employer A fails to offer minimum 
essential coverage and has 100 full-time employees, 10 of whom 
receive premium assistance credits for the entire year. The 
employer's assessable payment is $2,160 for each employee over 
the 30-employee threshold, for a total of $151,200 ($2,160 
multiplied by 70, that is, 100 minus 30).
---------------------------------------------------------------------------
    \7\For calendar years after 2014, the dollar amounts (which were 
initially $2,000 and $3,000) are increased by the percentage (if any) 
by which the average per capita premium for health insurance coverage 
in the United States for the preceding calendar year (as estimated by 
the Secretary of HHS no later than October 1 of the preceding calendar 
year) exceeds the average per capita premium for 2013 (as determined by 
the Secretary of HHS), rounded down to the next lowest multiple of $10.
---------------------------------------------------------------------------
    Generally an employee who is offered minimum essential 
coverage under an employer-sponsored plan is not eligible for a 
premium assistance credit or reduced cost-sharing unless the 
coverage is unaffordable or fails to provide minimum value.\8\ 
However, if an employer offers its full-time employees and 
their dependents minimum essential coverage under an employer-
sponsored plan and at least one full-time employee is certified 
as receiving a premium assistance credit or reduced cost-
sharing (because the coverage is unaffordable or fails to 
provide minimum value), the employer may be subject to an 
assessable payment of $3,240 (for 2016) (divided by 12 and 
applied on a monthly basis) multiplied by the number of such 
full-time employees. However, the assessable payment in this 
case is capped at the amount that would apply if the employer 
failed to offer its full-time employees and their dependents 
minimum essential coverage. For example, in 2016, Employer B 
offers minimum essential coverage and has 100 full-time 
employees, 20 of whom receive premium assistance credits for 
the entire year. The employer's assessable payment before 
consideration of the cap is $3,240 for each full-time employee 
receiving a credit, for a total of $64,800. The cap on the 
assessable payment is the amount that would have applied if the 
employer failed to offer coverage, or $151,200 ($2,160 
multiplied by 70, that is, 100 minus 30). In this example, the 
cap therefore does not affect the amount of the assessable 
payment, which remains at $64,800.
---------------------------------------------------------------------------
    \8\Under section 36B(c)(2)(C), coverage under an employer-sponsored 
plan is unaffordable if the employee's share of the premium for self-
only coverage exceeds (for 2016) 9.66 percent of household income, and 
the coverage fails to provide minimum value if the plan's share of 
total allowed cost of provided benefits is less than 60 percent of such 
costs. Treas. Reg. sec. 1.36B-2(c)(3)(vi) provides guidance on the 
determination of whether coverage provides minimum value.
---------------------------------------------------------------------------

                           REASONS FOR CHANGE

    The Committee believes that requiring eligible educational 
institutions to take student workers into account for purposes 
of the employer shared responsibility requirement discourages 
these educational institutions from offering work opportunities 
to their full-time students.

                        EXPLANATION OF PROVISION

    Under the provision, for purposes of the employer shared 
responsibility requirement, services rendered as a student 
worker to an eligible educational institution\9\ are not taken 
into account as services provided by an employee. For purposes 
of the provision, the term ``student worker'' means, with 
respect to any eligible educational institution, any individual 
who both (1) is employed by such institution, and (2) is a 
student enrolled at the institution and is carrying a full-time 
academic workload, as determined by the institution, under a 
standard applicable to all students enrolled in a particular 
academic program.
---------------------------------------------------------------------------
    \9\Eligible educational institution is defined in section 
25A(f)(2).
---------------------------------------------------------------------------

                             EFFECTIVE DATE

    The provision applies to months beginning after December 
31, 2015.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the vote of the Committee on Ways and Means in its 
consideration of H.R. 210, the ``Student Worker Exemption Act 
of 2016,'' on June 15, 2016.

                       Motion To Report the Bill

    The bill, H.R. 210, as amended, was ordered favorably 
reported to the House of Representatives by a voice vote (with 
a quorum being present).

                     IV. BUDGET EFFECTS OF THE BILL

               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the effects on the budget of the bill, H.R. 210, as 
reported.
    The bill, as reported, is estimated to have the following 
effect on Federal budget receipts for fiscal years 2017-2026:

----------------------------------------------------------------------------------------------------------------
                                     Fiscal years, in millions of dollars--
-----------------------------------------------------------------------------------------------------------------
  2017      2018      2019     2020     2021     2022     2023     2024     2025     2026    2017-21    2017-26
----------------------------------------------------------------------------------------------------------------
    \2\       \2\      \2\      \2\      \2\      \2\      \2\      \2\      \2\      \2\         -1         -3
----------------------------------------------------------------------------------------------------------------
Note: Details do not add to totals due to rounding.
\1\It is estimated that this provision would have a negligible effect on insurance coverage.
\2\Loss of less than $500,000.

    Pursuant to clause 8 of rule XIII of the Rules of the House 
of Representatives, the following statement is made by the 
Joint Committee on Taxation with respect to the provisions of 
the bill amending the Internal Revenue Code of 1986: The gross 
budgetary effect (before incorporating macroeconomic effects) 
in any fiscal year is less than 0.25 percent of the current 
projected gross domestic product of the United States for that 
fiscal year; therefore, the bill is not ``major legislation'' 
for purposes of requiring that the estimate include the 
budgetary effects of changes in economic output, employment, 
capital stock and other macroeconomic variables.

B. Statement Regarding New Budget Authority and Tax Expenditures Budget 
                               Authority

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
bill involves no new or increased budget authority. The 
Committee further states that there are no new or increased tax 
expenditures.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the CBO, the following statement by CBO is 
provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 30, 2016.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 210, the Student 
Worker Exemption Act of 2016.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Peter 
Huether.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 210--Student Worker Exemption Act of 2016

    H.R. 210 would amend the Internal Revenue Code to modify 
the requirement under current law that some large employers who 
do not offer health insurance coverage that meets certain 
standards must pay a penalty if they have any full-time 
employees who receive a subsidy through a health insurance 
marketplace. Specifically, H.R. 210 would exclude work done by 
full-time students employed by eligible educational 
institutions from those requirements.
    The staff of the Joint Committee on Taxation (JCT) 
estimates that enacting H.R. 210 would reduce revenues by about 
$3 million over the 2016-2026 period. JCT estimates that the 
bill would have no effect on revenues in 2016 and would reduce 
revenues by less than $500,000 each year thereafter through 
2026. JCT also estimates that the bill would have a negligible 
effect on health insurance coverage.
    The Statutory Pay-As-You-Go Act of 2010 establishes budget-
reporting and enforcement procedures for legislation affecting 
revenues or direct spending. The net changes in revenues that 
are subject to those pay-as-you-go procedures are shown in the 
following table.
    CBO and JCT estimate that enacting the bill would not 
increase on-budget deficits or net direct spending by more than 
$5 billion in any of the four 10-year periods beginning in 
2027.
    JCT has determined that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Peter Huether. 
The estimate was approved by Mark Booth, Unit Chief, Revenue 
Estimating.

            CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 210, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON WAYS AND MEANS ON JUNE 15, 2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2016   2017   2018   2019   2020   2021   2022   2023   2024   2025   2026  2016-2021  2016-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               NET INCREASE IN THE DEFICIT
 
Statutory Pay-As-You-Go Effects......................      0      0      0      0      0      0      0      0      0      0      0         1          3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Staff of the Joint Committee on Taxation.
Note: Components do not sum to total because of rounding.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE

          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives (relating to oversight findings), 
the Committee advises that it was as a result of the 
Committee's review of the provisions of H.R. 210 that the 
Committee concluded that it is appropriate to report the bill, 
as amended, favorably to the House of Representatives with the 
recommendation that the bill do pass.

        B. Statement of General Performance Goals and Objectives

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
bill contains no measure that authorizes funding, so no 
statement of general performance goals and objectives for which 
any measure authorizes funding is required.

              C. Information Relating to Unfunded Mandates

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                D. Applicability of House Rule XXI 5(b)

    Rule XXI 5(b) of the Rules of the House of Representatives 
provides, in part, that ``A bill or joint resolution, 
amendment, or conference report carrying a Federal income tax 
rate increase may not be considered as passed or agreed to 
unless so determined by a vote of not less than three-fifths of 
the Members voting, a quorum being present.'' The Committee has 
carefully reviewed the bill, and states that the bill does not 
involve any Federal income tax rate increases within the 
meaning of the rule.

                       E. Tax Complexity Analysis

    The following statement is made pursuant to clause 3(h)(1) 
of rule XIII of the Rules of the House of Representatives. 
Section 4022(b) of the Internal Revenue Service Restructuring 
and Reform Act of 1998 (``IRS Reform Act'') requires the staff 
of the Joint Committee on Taxation (in consultation with the 
Internal Revenue Service and the Treasury Department) to 
provide a tax complexity analysis. The complexity analysis is 
required for all legislation reported by the Senate Committee 
on Finance, the House Committee on Ways and Means, or any 
committee of conference if the legislation includes a provision 
that directly or indirectly amends the Internal Revenue Code of 
1986 and has widespread applicability to individuals or small 
businesses.
    Pursuant to clause 3(h)(1) of rule XIII of the Rules of the 
House of Representatives, the staff of the Joint Committee on 
Taxation has determined that a complexity analysis is not 
required under section 4022(b) of the IRS Reform Act because 
the bill contains no provisions that amend the Internal Revenue 
Code of 1986 and that have ``widespread applicability'' to 
individuals or small businesses, within the meaning of the 
rule.

  F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                   G. Duplication of Federal Programs

    In compliance with Sec. 3(g)(2) of H. Res. 5 (114th 
Congress), the Committee states that no provision of the bill 
establishes or reauthorizes: (1) a program of the Federal 
Government known to be duplicative of another Federal program, 
(2) a program included in any report from the Government 
Accountability Office to Congress pursuant to section 21 of 
Public Law 111-139, or (3) a program related to a program 
identified in the most recent Catalog of Federal Domestic 
Assistance, published pursuant to the Federal Program 
Information Act (Public Law 95-220, as amended by Public Law 
98-169).

                 H. Disclosure of Directed Rule Makings

    In compliance with Sec. 3(i) of H. Res. 5 (114th Congress), 
the following statement is made concerning directed rule 
makings: The Committee estimates that the bill requires no 
directed rule makings within the meaning of such section.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

  A. Text of Existing Law Amended or Repealed by the Bill, as Reported

    In compliance with clause 3(e)(1)(A) of rule XIII of the 
Rules of the House of Representatives, the text of each section 
proposed to be amended or repealed by the bill, as reported, is 
shown below:

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e)(1)(A) of rule XIII of the 
Rules of the House of Representatives, the text of each section 
proposed to be amended or repealed by the bill, as reported, is 
shown below:

INTERNAL REVENUE CODE OF 1986

           *       *       *       *       *       *       *

Subtitle D--Miscellaneous Excise Taxes

           *       *       *       *       *       *       *

CHAPTER 43--QUALIFIED PENSION, ETC., PLANS

           *       *       *       *       *       *       *

SEC. 4980H. SHARED RESPONSIBILITY FOR EMPLOYERS REGARDING HEALTH 
                    COVERAGE.

  (a) Large Employers Not Offering Health Coverage.--If--
          (1) any applicable large employer fails to offer to 
        its full-time employees (and their dependents) the 
        opportunity to enroll in minimum essential coverage 
        under an eligible employer-sponsored plan (as defined 
        in section 5000A(f)(2)) for any month, and
          (2) at least one full-time employee of the applicable 
        large employer has been certified to the employer under 
        section 1411 of the Patient Protection and Affordable 
        Care Act as having enrolled for such month in a 
        qualified health plan with respect to which an 
        applicable premium tax credit or cost-sharing reduction 
        is allowed or paid with respect to the employee,
then there is hereby imposed on the employer an assessable 
payment equal to the product of the applicable payment amount 
and the number of individuals employed by the employer as full-
time employees during such month.
  (b) Large Employers Offering Coverage With Employees Who 
Qualify for Premium Tax Credits or Cost-Sharing Reductions.--
          (1) In general.--If--
                  (A) an applicable large employer offers to 
                its full-time employees (and their dependents) 
                the opportunity to enroll in minimum essential 
                coverage under an eligible employer-sponsored 
                plan (as defined in section 5000A(f)(2)) for 
                any month, and
                  (B) 1 or more full-time employees of the 
                applicable large employer has been certified to 
                the employer under section 1411 of the Patient 
                Protection and Affordable Care Act as having 
                enrolled for such month in a qualified health 
                plan with respect to which an applicable 
                premium tax credit or cost-sharing reduction is 
                allowed or paid with respect to the employee,
        then there is hereby imposed on the employer an 
        assessable payment equal to the product of the number 
        of full-time employees of the applicable large employer 
        described in subparagraph (B) for such month and an 
        amount equal to \1/12\ of $3,000.
          (2) Overall limitation.--The aggregate amount of tax 
        determined under paragraph (1) with respect to all 
        employees of an applicable large employer for any month 
        shall not exceed the product of the applicable payment 
        amount and the number of individuals employed by the 
        employer as full-time employees during such month.
  (c) Definitions and Special Rules.--For purposes of this 
section--
          (1) Applicable payment amount.--The term ``applicable 
        payment amount'' means, with respect to any month, \1/
        12\ of $2,000.
          (2) Applicable large employer.--
                  (A) In general.--The term ``applicable large 
                employer'' means, with respect to a calendar 
                year, an employer who employed an average of at 
                least 50 full-time employees on business days 
                during the preceding calendar year.
                  (B) Exemption for certain employers.--
                          (i) In general.--An employer shall 
                        not be considered to employ more than 
                        50 full-time employees if--
                                  (I) the employer's workforce 
                                exceeds 50 full-time employees 
                                for 120 days or fewer during 
                                the calendar year, and
                                  (II) the employees in excess 
                                of 50 employed during such 120-
                                day period were seasonal 
                                workers.
                          (ii) Definition of seasonal 
                        workers.--The term ``seasonal worker'' 
                        means a worker who performs labor or 
                        services on a seasonal basis as defined 
                        by the Secretary of Labor, including 
                        workers covered by section 500.20(s)(1) 
                        of title 29, Code of Federal 
                        Regulations and retail workers employed 
                        exclusively during holiday seasons.
                  (C) Rules for determining employer size.--For 
                purposes of this paragraph--
                          (i) Application of aggregation rule 
                        for employers.--All persons treated as 
                        a single employer under subsection (b), 
                        (c), (m), or (o) of section 414 of the 
                        Internal Revenue Code of 1986 shall be 
                        treated as 1 employer.
                          (ii) Employers not in existence in 
                        preceding year.--In the case of an 
                        employer which was not in existence 
                        throughout the preceding calendar year, 
                        the determination of whether such 
                        employer is an applicable large 
                        employer shall be based on the average 
                        number of employees that it is 
                        reasonably expected such employer will 
                        employ on business days in the current 
                        calendar year.
                          (iii) Predecessors.--Any reference in 
                        this subsection to an employer shall 
                        include a reference to any predecessor 
                        of such employer.
                  (D) Application of employer size to 
                assessable penalties.--
                          (i) In general.--The number of 
                        individuals employed by an applicable 
                        large employer as full-time employees 
                        during any month shall be reduced by 30 
                        solely for purposes of calculating--
                                  (I) the assessable payment 
                                under subsection (a), or
                                  (II) the overall limitation 
                                under subsection (b)(2).
                          (ii) Aggregation.--In the case of 
                        persons treated as 1 employer under 
                        subparagraph (C)(i), only 1 reduction 
                        under subclause (I) or (II) shall be 
                        allowed with respect to such persons 
                        and such reduction shall be allocated 
                        among such persons ratably on the basis 
                        of the number of full-time employees 
                        employed by each such person.
                  (E) Full-time equivalents treated as full-
                time employees.--Solely for purposes of 
                determining whether an employer is an 
                applicable large employer under this paragraph, 
                an employer shall, in addition to the number of 
                full-time employees for any month otherwise 
                determined, include for such month a number of 
                full-time employees determined by dividing the 
                aggregate number of hours of service of 
                employees who are not full-time employees for 
                the month by 120.
                  (F) Exemption for health coverage under 
                TRICARE or the Veterans Administration.--Solely 
                for purposes of determining whether an employer 
                is an applicable large employer under this 
                paragraph for any month, an individual shall 
                not be taken into account as an employee for 
                such month if such individual has medical 
                coverage for such month under--
                          (i) chapter 55 of title 10, United 
                        States Code, including coverage under 
                        the TRICARE program, or
                          (ii) under a health care program 
                        under chapter 17 or 18 of title 38, 
                        United States Code, as determined by 
                        the Secretary of Veterans Affairs, in 
                        coordination with the Secretary of 
                        Health and Human Services and the 
                        Secretary.
          (3) Applicable premium tax credit and cost-sharing 
        reduction.--The term ``applicable premium tax credit 
        and cost-sharing reduction'' means--
                  (A) any premium tax credit allowed under 
                section 36B,
                  (B) any cost-sharing reduction under section 
                1402 of the Patient Protection and Affordable 
                Care Act, and
                  (C) any advance payment of such credit or 
                reduction under section 1412 of such Act.
          (4) Full-time employee.--
                  (A) In general.--The term ``full-time 
                employee'' means, with respect to any month, an 
                employee who is employed on average at least 30 
                hours of service per week.
                  (B) Hours of service.--The Secretary, in 
                consultation with the Secretary of Labor, shall 
                prescribe such regulations, rules, and guidance 
                as may be necessary to determine the hours of 
                service of an employee, including rules for the 
                application of this paragraph to employees who 
                are not compensated on an hourly basis.
          (5) Inflation adjustment.--
                  (A) In general.--In the case of any calendar 
                year after 2014, each of the dollar amounts in 
                subsection (b) and paragraph (1) shall be 
                increased by an amount equal to the product 
                of--
                          (i) such dollar amount, and
                          (ii) the premium adjustment 
                        percentage (as defined in section 
                        1302(c)(4) of the Patient Protection 
                        and Affordable Care Act) for the 
                        calendar year.
                  (B) Rounding.--If the amount of any increase 
                under subparagraph (A) is not a multiple of 
                $10, such increase shall be rounded to the next 
                lowest multiple of $10.
           (6) Other definitions.--Any term used in this 
        section which is also used in the Patient Protection 
        and Affordable Care Act shall have the same meaning as 
        when used in such Act.
           (7) Tax nondeductible.--For denial of deduction for 
        the tax imposed by this section, see section 275(a)(6).
  (d) Administration and Procedure.--
          (1) In general.--Any assessable payment provided by 
        this section shall be paid upon notice and demand by 
        the Secretary, and shall be assessed and collected in 
        the same manner as an assessable penalty under 
        subchapter B of chapter 68.
          (2) Time for payment.--The Secretary may provide for 
        the payment of any assessable payment provided by this 
        section on an annual, monthly, or other periodic basis 
        as the Secretary may prescribe.
          (3) Coordination with credits, etc.--The Secretary 
        shall prescribe rules, regulations, or guidance for the 
        repayment of any assessable payment (including 
        interest) if such payment is based on the allowance or 
        payment of an applicable premium tax credit or cost-
        sharing reduction with respect to an employee, such 
        allowance or payment is subsequently disallowed, and 
        the assessable payment would not have been required to 
        be made but for such allowance or payment.

           *       *       *       *       *       *       *

      B. Changes in Existing Law Proposed by the Bill, as Reported

    In compliance with clause 3(e)(1)(B) of rule XIII of the 
Rules of the House of Representatives, changes in existing law 
proposed by the bill, as reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italics, existing law in 
which no change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e)(1)(B) of rule XIII of the 
Rules of the House of Representatives, changes in existing law 
proposed by the bill, as reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italics, and existing law in 
which no change is proposed is shown in roman):

INTERNAL REVENUE CODE OF 1986

           *       *       *       *       *       *       *

Subtitle D--Miscellaneous Excise Taxes

           *       *       *       *       *       *       *

CHAPTER 43--QUALIFIED PENSION, ETC., PLANS

           *       *       *       *       *       *       *

SEC. 4980H. SHARED RESPONSIBILITY FOR EMPLOYERS REGARDING HEALTH 
                    COVERAGE.

  (a) Large Employers Not Offering Health Coverage.--If--
          (1) any applicable large employer fails to offer to 
        its full-time employees (and their dependents) the 
        opportunity to enroll in minimum essential coverage 
        under an eligible employer-sponsored plan (as defined 
        in section 5000A(f)(2)) for any month, and
          (2) at least one full-time employee of the applicable 
        large employer has been certified to the employer under 
        section 1411 of the Patient Protection and Affordable 
        Care Act as having enrolled for such month in a 
        qualified health plan with respect to which an 
        applicable premium tax credit or cost-sharing reduction 
        is allowed or paid with respect to the employee,
then there is hereby imposed on the employer an assessable 
payment equal to the product of the applicable payment amount 
and the number of individuals employed by the employer as full-
time employees during such month.
  (b) Large Employers Offering Coverage With Employees Who 
Qualify for Premium Tax Credits or Cost-Sharing Reductions.--
          (1) In general.--If--
                  (A) an applicable large employer offers to 
                its full-time employees (and their dependents) 
                the opportunity to enroll in minimum essential 
                coverage under an eligible employer-sponsored 
                plan (as defined in section 5000A(f)(2)) for 
                any month, and
                  (B) 1 or more full-time employees of the 
                applicable large employer has been certified to 
                the employer under section 1411 of the Patient 
                Protection and Affordable Care Act as having 
                enrolled for such month in a qualified health 
                plan with respect to which an applicable 
                premium tax credit or cost-sharing reduction is 
                allowed or paid with respect to the employee,
        then there is hereby imposed on the employer an 
        assessable payment equal to the product of the number 
        of full-time employees of the applicable large employer 
        described in subparagraph (B) for such month and an 
        amount equal to \1/12\ of $3,000.
          (2) Overall limitation.--The aggregate amount of tax 
        determined under paragraph (1) with respect to all 
        employees of an applicable large employer for any month 
        shall not exceed the product of the applicable payment 
        amount and the number of individuals employed by the 
        employer as full-time employees during such month.
  (c) Definitions and Special Rules.--For purposes of this 
section--
          (1) Applicable payment amount.--The term ``applicable 
        payment amount'' means, with respect to any month, \1/
        12\ of $2,000.
          (2) Applicable large employer.--
                  (A) In general.--The term ``applicable large 
                employer'' means, with respect to a calendar 
                year, an employer who employed an average of at 
                least 50 full-time employees on business days 
                during the preceding calendar year.
                  (B) Exemption for certain employers.--
                          (i) In general.--An employer shall 
                        not be considered to employ more than 
                        50 full-time employees if--
                                  (I) the employer's workforce 
                                exceeds 50 full-time employees 
                                for 120 days or fewer during 
                                the calendar year, and
                                  (II) the employees in excess 
                                of 50 employed during such 120-
                                day period were seasonal 
                                workers.
                          (ii) Definition of seasonal 
                        workers.--The term ``seasonal worker'' 
                        means a worker who performs labor or 
                        services on a seasonal basis as defined 
                        by the Secretary of Labor, including 
                        workers covered by section 500.20(s)(1) 
                        of title 29, Code of Federal 
                        Regulations and retail workers employed 
                        exclusively during holiday seasons.
                  (C) Rules for determining employer size.--For 
                purposes of this paragraph--
                          (i) Application of aggregation rule 
                        for employers.--All persons treated as 
                        a single employer under subsection (b), 
                        (c), (m), or (o) of section 414 of the 
                        Internal Revenue Code of 1986 shall be 
                        treated as 1 employer.
                          (ii) Employers not in existence in 
                        preceding year.--In the case of an 
                        employer which was not in existence 
                        throughout the preceding calendar year, 
                        the determination of whether such 
                        employer is an applicable large 
                        employer shall be based on the average 
                        number of employees that it is 
                        reasonably expected such employer will 
                        employ on business days in the current 
                        calendar year.
                          (iii) Predecessors.--Any reference in 
                        this subsection to an employer shall 
                        include a reference to any predecessor 
                        of such employer.
                  (D) Application of employer size to 
                assessable penalties.--
                          (i) In general.--The number of 
                        individuals employed by an applicable 
                        large employer as full-time employees 
                        during any month shall be reduced by 30 
                        solely for purposes of calculating--
                                  (I) the assessable payment 
                                under subsection (a), or
                                  (II) the overall limitation 
                                under subsection (b)(2).
                          (ii) Aggregation.--In the case of 
                        persons treated as 1 employer under 
                        subparagraph (C)(i), only 1 reduction 
                        under subclause (I) or (II) shall be 
                        allowed with respect to such persons 
                        and such reduction shall be allocated 
                        among such persons ratably on the basis 
                        of the number of full-time employees 
                        employed by each such person.
                  (E) Full-time equivalents treated as full-
                time employees.--Solely for purposes of 
                determining whether an employer is an 
                applicable large employer under this paragraph, 
                an employer shall, in addition to the number of 
                full-time employees for any month otherwise 
                determined, include for such month a number of 
                full-time employees determined by dividing the 
                aggregate number of hours of service of 
                employees who are not full-time employees for 
                the month by 120.
                  (F) Exemption for health coverage under 
                TRICARE or the Veterans Administration.--Solely 
                for purposes of determining whether an employer 
                is an applicable large employer under this 
                paragraph for any month, an individual shall 
                not be taken into account as an employee for 
                such month if such individual has medical 
                coverage for such month under--
                          (i) chapter 55 of title 10, United 
                        States Code, including coverage under 
                        the TRICARE program, or
                          (ii) under a health care program 
                        under chapter 17 or 18 of title 38, 
                        United States Code, as determined by 
                        the Secretary of Veterans Affairs, in 
                        coordination with the Secretary of 
                        Health and Human Services and the 
                        Secretary.
          (3) Applicable premium tax credit and cost-sharing 
        reduction.--The term ``applicable premium tax credit 
        and cost-sharing reduction'' means--
                  (A) any premium tax credit allowed under 
                section 36B,
                  (B) any cost-sharing reduction under section 
                1402 of the Patient Protection and Affordable 
                Care Act, and
                  (C) any advance payment of such credit or 
                reduction under section 1412 of such Act.
          (4) Full-time employee.--
                  (A) In general.--The term ``full-time 
                employee'' means, with respect to any month, an 
                employee who is employed on average at least 30 
                hours of service per week.
                  (B) Hours of service.--The Secretary, in 
                consultation with the Secretary of Labor, shall 
                prescribe such regulations, rules, and guidance 
                as may be necessary to determine the hours of 
                service of an employee, including rules for the 
                application of this paragraph to employees who 
                are not compensated on an hourly basis.
          (5) Exception for student workers.--
                  (A) In general.--Services rendered as a 
                student worker to an eligible educational 
                institution (as defined in section 25A(f)(2)) 
                shall not be taken into account under this 
                section as service provided by an employee.
                  (B) Student worker.--For purposes of this 
                paragraph, the term ``student worker'' means, 
                with respect to any eligible educational 
                institution (as so defined), any individual 
                who--
                          (i) is employed by such institution, 
                        and
                          (ii) is a student enrolled at the 
                        institution and is carrying a full-time 
                        academic workload, as determined by the 
                        institution, under a standard 
                        applicable to all students enrolled in 
                        a particular educational program.
          [(5)] (6) Inflation adjustment.--
                  (A) In general.--In the case of any calendar 
                year after 2014, each of the dollar amounts in 
                subsection (b) and paragraph (1) shall be 
                increased by an amount equal to the product 
                of--
                          (i) such dollar amount, and
                          (ii) the premium adjustment 
                        percentage (as defined in section 
                        1302(c)(4) of the Patient Protection 
                        and Affordable Care Act) for the 
                        calendar year.
                  (B) Rounding.--If the amount of any increase 
                under subparagraph (A) is not a multiple of 
                $10, such increase shall be rounded to the next 
                lowest multiple of $10.
          [(6)] (7) Other definitions.--Any term used in this 
        section which is also used in the Patient Protection 
        and Affordable Care Act shall have the same meaning as 
        when used in such Act.
          [(7)] (8) Tax nondeductible.--For denial of deduction 
        for the tax imposed by this section, see section 
        275(a)(6).
  (d) Administration and Procedure.--
          (1) In general.--Any assessable payment provided by 
        this section shall be paid upon notice and demand by 
        the Secretary, and shall be assessed and collected in 
        the same manner as an assessable penalty under 
        subchapter B of chapter 68.
          (2) Time for payment.--The Secretary may provide for 
        the payment of any assessable payment provided by this 
        section on an annual, monthly, or other periodic basis 
        as the Secretary may prescribe.
          (3) Coordination with credits, etc.--The Secretary 
        shall prescribe rules, regulations, or guidance for the 
        repayment of any assessable payment (including 
        interest) if such payment is based on the allowance or 
        payment of an applicable premium tax credit or cost-
        sharing reduction with respect to an employee, such 
        allowance or payment is subsequently disallowed, and 
        the assessable payment would not have been required to 
        be made but for such allowance or payment.

           *       *       *       *       *       *       *

                                  [all]
```