I 
113TH CONGRESS 
2D SESSION 
H. R. 5860 
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 ar-
rangements from group health plan requirements, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 11, 2014 
Mr. BOUSTANY (for himself and Mr. THOMPSON of California) 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 allow small 
businesses to use pre-tax dollars for assistance to employ-
ees purchasing policies in the individual market and ex-
cept certain health reimbursement arrangements from 
group health plan requirements, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Small Business 
Healthcare Relief Act of 2014’’. 
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SEC. 2. PERMITTING SMALL BUSINESSES TO USE PRE-TAX 
DOLLARS FOR ASSISTANCE TO EMPLOYEES 
PURCHASING POLICIES IN INDIVIDUAL MAR-
KET. 
(a) IN GENERAL.—Section 106 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
‘‘(e) PRE-TAX DOLLARS FOR QUALIFIED HEALTH 
PLANS.— 
‘‘(1) IN GENERAL.—Amounts paid by an eligi-
ble 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 pur-
poses of this subsection and subsection (f), the term 
‘eligible small employer’ means an employer who— 
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‘‘(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 em-
ployees who are treated as employed by a single em-
ployer under subsection (b), (c), or (m) of section 
414 shall be treated as employed by a single em-
ployer for purposes of this subsection.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2013. 
SEC. 3. STANDALONE HEALTH REIMBURSEMENT ARRANGE-
MENTS. 
(a) IN GENERAL.—Section 106 of the Internal Rev-
enue Code is amended Code of 1986 is amended by adding 
at the end the following new subsection: 
‘‘(f) QUALIFIED
HEALTH
REIMBURSEMENT
AR-
RANGEMENTS.— 
‘‘(1) IN GENERAL.—Amounts paid by an eligi-
ble small employer on behalf of an employee of the 
employer to a qualified health reimbursement ar-
rangement shall be treated as employer-provided 
coverage for medical expenses under an accident or 
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health plan and shall not be considered a group 
health plan for purposes of section 9815. 
‘‘(2) IN GENERAL.—For purposes of this sub-
section, the term ‘qualified health reimbursement ar-
rangement’ means an arrangement— 
‘‘(A) under which the employee may be re-
imbursed— 
‘‘(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 em-
ployer with respect to an employee for the tax-
able year are not in excess of the dollar amount 
in effect under section 125(i) for such taxable 
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year (200 percent of such amount in the case 
of family coverage). 
‘‘(3) CERTAIN CONTROLLED GROUPS.—All em-
ployees who are treated as employed by a single em-
ployer under subsection (b), (c), or, (m) of section 
414 shall be treated as employed by a single em-
ployer for purposes of this subsection.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2013. 
SEC. 4. NO SUBSIDIES ALLOWED WITH RESPECT TO 
HEALTH PLAN ACQUIRED THROUGH PRE-TAX 
DOLLARS FOR QUALIFIED HEALTH PLAN OR 
QUALIFIED HEALTH REIMBURSEMENT AR-
RANGEMENT. 
(a) COORDINATION WITH PREMIUM CREDIT AND RE-
DUCED 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
ARRANGE-
MENTS.—The term ‘coverage month’ shall 
not include any month during which an in-
dividual is covered under a qualified health 
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