I 

113TH CONGRESS 

2D SESSION H. R. 4128 

To amend the Internal Revenue Code of 1986 to expand and modify the 

credit for employee health insurance expenses of small employers. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 28, 2014 

Ms. DELBENE (for herself, Ms. SHEA-PORTER, and Mr. PALLONE) introduced 

the following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to expand 

and modify the credit for employee health insurance expenses of small employers. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Small Business Tax 

5 Credit Accessibility Act’’. 

6 SEC. 2. SENSE OF THE CONGRESS. 

7 It is the sense of the Congress that the Obama ad8 ministration should work to make the small business 

9 health care tax credit under section 45R of the Internal 


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1 Revenue Code of 1986 more accessible for small employ2 ers. 

3 SEC. 3. EXPANSION AND MODIFICATION OF CREDIT FOR 

4 EMPLOYEE HEALTH INSURANCE EXPENSES 

5 OF SMALL EMPLOYERS. 

6 (a) EXPANSION OF DEFINITION OF ELIGIBLE SMALL

7 EMPLOYER.—Subparagraph (A) of section 45R(d)(1) of 

8 the Internal Revenue Code of 1986 is amended by striking 

9 ‘‘25’’ and inserting ‘‘50’’. 

10 (b) AMENDMENT TO PHASEOUT DETERMINATION.— 

11 Subsection (c) of section 45R of the Internal Revenue 

12 Code of 1986 is amended to read as follows: 

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

14 NUMBER OF EMPLOYEES AND AVERAGE WAGES.—The 

15 amount of the credit determined under subsection (b) 

16 (without regard to this subsection) shall be adjusted (but 

17 not below zero) by multiplying such amount by the prod18 uct of— 

19 ‘‘(1) the lesser of— 

20 ‘‘(A) a fraction the numerator of which is 

21 the excess (if any) of 50 over the total number 

22 of full-time equivalent employees of the em23 ployer and the denominator of which is 30, and 

24 ‘‘(B) 1, and 

25 ‘‘(2) the lesser of— 


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1 ‘‘(A) a fraction the numerator of which is 

2 the excess (if any) of— 

3 ‘‘(i) the dollar amount in effect under 

4 subsection (d)(3)(B) for the taxable year, 

5 multiplied by 2, over 

6 ‘‘(ii) the average annual wages of the 

7 employer for such taxable year, and 

8 the denominator of which is the dollar amount 

9 so in effect under subsection (d)(3)(B), and 

10 ‘‘(B) 1.’’. 

11 (c) PARTIALLY PHASED OUT CREDIT ALLOWED FOR

12 INSURANCE OUTSIDE AN EXCHANGE.— 

13 (1) IN GENERAL.—Section 45R of the Internal 

14 Revenue Code of 1986 is amended by redesignating 

15 subsections (h) and (i) as subsections (i) and (j), re16 spectively, and by inserting after subsection (g) the 

17 following new subsection: 

18 ‘‘(h) PARTIALLY PHASED OUT CREDIT ALLOWED

19 FOR INSURANCE OUTSIDE AN EXCHANGE FOR 2014.— 

20 ‘‘(1) IN GENERAL.—If an eligible small em21 ployer offers to its employees in a manner other 

22 than through an Exchange a health plan that meets 

23 the requirements of paragraph (2), the following 

24 modifications shall apply with respect to a taxable 

25 year beginning in 2014: 


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1 ‘‘(A) QUALIFIED HEALTH PLAN.—This 

2 section and section 280C(h) shall be applied for 

3 such taxable year by treating such plan as a 

4 qualified health plan. 

5 ‘‘(B) REDUCED CREDIT PERCENTAGE.— 

6 Subsection (b) shall be applied— 

7 ‘‘(i) by substituting ‘25 percent’ for 

8 ‘35 percent’, 

9 ‘‘(ii) by substituting ‘35 percent’ for 

10 ‘50 percent’, and 

11 ‘‘(iii) without regard to ‘through an 

12 Exchange’ in paragraph (1) thereof. 

13 ‘‘(C) CONTRIBUTION ARRANGEMENTS.— 

14 Subsection (d)(4) shall be applied without re15 gard to ‘through an exchange’. 

16 ‘‘(D) CREDIT PERIOD.— 

17 ‘‘(i) IN GENERAL.—The credit under 

18 this section shall be determined without re19 gard to whether such taxable year is in a 

20 credit period. 

21 ‘‘(ii) YEAR TAKEN INTO ACCOUNT AS

22 PORTION OF CREDIT PERIOD IN SUBSE23 QUENT YEARS.—For purposes of applying 

24 this section to taxable years beginning 

25 after 2014 in which the employer offers a 


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1 qualified health plan (without regard to 

2 subparagraph (A)) to its employees 

3 through an Exchange, subsection (e)(2) 

4 shall be applied by substituting ‘2-consecu5 tive-taxable’ for ‘3-consecutive-taxable’. 

6 ‘‘(2) REQUIREMENTS.—A health plan meets the 

7 requirements of this paragraph if such plan— 

8 ‘‘(A) provides the essential health benefits 

9 package described in section 1302(a) of the Pa10 tient Protection and Affordable Care Act, and 

11 ‘‘(B) is offered by a health insurance 

12 issuer that— 

13 ‘‘(i) is licensed and in good standing 

14 to offer health insurance coverage in each 

15 State in which such issuer offers health in16 surance coverage, and 

17 ‘‘(ii) if such issuer offers health plans 

18 through an Exchange, agrees to charge the 

19 same premium rate for each qualified 

20 health plan of the issuer without regard to 

21 whether the plan is offered through an Ex22 change or whether the plan is offered di23 rectly from the issuer or through an 

24 agent.’’. 


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1 (2) CONFORMING AMENDMENT.—Section 

2 6055(b)(2)(C) of such Code is amended by striking 

3 ‘‘Exchange’’ and inserting ‘‘Exchange (or a plan 

4 with respect to which a credit is allowed under sec5 tion 45R by reason of subsection (h) thereof)’’. 

6 (d) EXTENSION OF CREDIT PERIOD.—Paragraph (2) 

7 of section 45R(e) of the Internal Revenue Code of 1986 

8 is amended by striking ‘‘2-consecutive-taxable’’ and insert9 ing ‘‘3-consecutive-taxable’’. 

10 (e) AVERAGE ANNUAL WAGE LIMITATION.—Sub11 paragraph (B) of section 45R(d)(3) of the Internal Rev12 enue Code of 1986 is amended to read as follows: 

13 ‘‘(B) DOLLAR AMOUNT.—For purposes of 

14 paragraph (1)(B) and subsection (c)(2), the 

15 dollar amount in effect under this paragraph is 

16 the amount equal to 110 percent of the poverty 

17 line (within the meaning of section 36B(d)(3)) 

18 for a family of 4.’’. 

19 (f) ELIMINATION OF UNIFORM PERCENTAGE CON20 TRIBUTION REQUIREMENT.—Paragraph (4) of section 

21 45R(d) of the Internal Revenue Code of 1986 is amended 

22 by striking ‘‘a uniform percentage (not less than 50 per23 cent)’’ and inserting ‘‘at least 50 percent’’. 

24 (g) ELIMINATION OF CAP RELATING TO AVERAGE

25 LOCAL PREMIUMS.—Subsection (b) of section 45R of the 


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1 Internal Revenue Code of 1986 is amended by striking 

2 ‘‘the lesser of’’ and all that follows and inserting ‘‘the ag3 gregate amount of nonelective contributions the employer 

4 made on behalf of its employees during the taxable year 

5 under the arrangement described in subsection (d)(4) for 

6 premiums for qualified health plans offered by the em7 ployer to its employees through an Exchange.’’. 

8 (h) CREDIT AVAILABILITY FOR FAMILY MEMBERS IN

9 CERTAIN CASES.—Clause (iv) of section 45R(e)(1)(A) of 

10 the Internal Revenue Code of 1986 is amended to read 

11 as follows: 

12 ‘‘(iv) any individual who is a spouse 

13 or dependent (within the meaning of sec14 tion 152) of an individual described in 

15 clause (i), (ii), or (iii).’’. 

16 (i) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to amounts paid or incurred in tax18 able years beginning after December 31, 2013. 

Æ 


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