Small Business Healthcare Relief Act of 2014

To amend the Internal Revenue Code of 1986 to allow small businesses to use pre-tax dollars for assistance to employees purchasing policies in the individual market and except certain health reimbursement arrangements from group health plan requirements, and for other purposes. 1. Short title This Act may be cited as the Small Business Healthcare Relief Act of 2014 2. Permitting small businesses to use pre-tax dollars for assistance to employees purchasing policies in individual market (a) In general Section 106 (e) Pre-Tax Dollars for Qualified Health Plans (1) In general Amounts paid by an eligible small employer on behalf of an employee of the employer for premiums for a qualified health plan (as defined in section 1301 of the Patient Protection and Affordable Care Act)— (A) which covers the employee, employee’s spouse, or any dependent of the employee, and (B) which is offered in the individual market within a State, shall be treated as employer-provided coverage for medical expenses under an accident or health plan and shall not be considered a group health plan for purposes of section 9815. (2) Eligible small employer For purposes of this subsection and subsection (f), the term eligible small employer (A) is not an applicable large employer (as defined in section 4980H(c)(2)(A)), and (B) does not offer its employees any group health plan other than an arrangement described in paragraph (1) or subsection (f). (3) Certain controlled groups All employees who are treated as employed by a single employer under subsection (b), (c), or (m) of section 414 shall be treated as employed by a single employer for purposes of this subsection. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2013. 3. Standalone health reimbursement arrangements (a) In general Section 106 of the Internal Revenue Code is amended Code of 1986 is amended by adding at the end the following new subsection: (f) Qualified health reimbursement arrangements (1) In general Amounts paid by an eligible small employer on behalf of an employee of the employer to a qualified health reimbursement arrangement shall be treated as employer-provided coverage for medical expenses under an accident or health plan and shall not be considered a group health plan for purposes of section 9815. (2) In general For purposes of this subsection, the term qualified health reimbursement arrangement (A) under which the employee may be reimbursed— (i) for premiums for a qualified health plan (as defined in section 1301 of the Patient Protection and Affordable Care Act) which covers the employee, employee’s spouse, or any dependent of the employee, and is offered in the individual market within a State, and (ii) for expenses incurred for medical care (as defined in section 213(d)) of the employee, the employee’s spouse, or any such dependent of the employee, (B) which is provided by an eligible small employer, and (C) under which contributions by the employer with respect to an employee for the taxable year are not in excess of the dollar amount in effect under section 125(i) for such taxable year (200 percent of such amount in the case of family coverage). (3) Certain controlled groups All employees who are treated as employed by a single employer under subsection (b), (c), or, (m) of section 414 shall be treated as employed by a single employer for purposes of this subsection. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2013. 4. No subsidies allowed with respect to health plan acquired through pre-tax dollars for qualified health plan or qualified health reimbursement arrangement (a) Coordination With Premium Credit and Reduced Cost-Sharing Section 36B(c)(2)(B) of such Code is amended by adding at the end the following new clause: (iii) Pre-tax dollars for a qualified health plan and Qualified health reimbursement arrangements The term coverage month . (b) Effective date The amendment made by this section shall apply to months beginning after December 31, 2013. 5. Pre-tax dollars for a qualified health plan and qualified health reimbursement arrangements excepted from group health plan requirements (a) In general Section 9832(c)(1) of such Code is amended by redesignating subparagraph (H) as subparagraph (J) and by inserting after subparagraph (G) the following new subparagraphs: (H) An arrangement described in section 106(e) (relating to pre-tax dollars for a qualified health plan). (I) Qualified health reimbursement arrangement (as defined in section 106(f)). . (b) Effective date The amendment made by this section shall apply to plan years beginning after December 31, 2013.

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