I 
111TH CONGRESS 
1ST SESSION H. R. 3115 
To amend the Internal Revenue Code of 1986 to provide credits to small 
businesses and their employees for health insurance coverage. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 7, 2009 
Mr. HODES (for himself and Ms. SHEA-PORTER) 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 provide 
credits to small businesses and their employees for health 
insurance coverage. 
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 Health 
Care Affordability Act of 2009’’. 
SEC. 2. SMALL EMPLOYERS BUSINESS CREDIT FOR PRO-
VIDING EMPLOYEE HEALTH INSURANCE. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
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1986 (relating to business related credits) is amended by 
adding at the end the following new section: 
‘‘SEC. 45R. EMPLOYEE HEALTH INSURANCE COVERAGE BY 
SMALL EMPLOYERS. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of an eligible small employer, the health insur-
ance credit determined under this section for any taxable 
year is an amount equal to the aggregate amount paid 
or incurred by the taxpayer for the taxable year for quali-
fied health insurance for employees of the taxpayer. 
‘‘(b) DOLLAR LIMITATION.— 
‘‘(1) ANNUAL LIMITATION.—The amount of the 
credit determined under this section with respect to 
an employee for any taxable year shall not exceed 
the sum of the amounts paid by the taxpayer for 
qualified health insurance for such employee for cov-
erage months of such employee during the taxable 
year. 
‘‘(2) MONTHLY LIMITATION.—For purposes of 
paragraph (1), amounts paid by the taxpayer for 
qualified health insurance for an employee for any 
coverage month of such individual during the taxable 
year shall not be taken into account to the extent 
such amounts exceed 1⁄12 of the following: 
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‘‘(A) $1,000 in the case of coverage of the 
employee. 
‘‘(B) $1,750 in the case of two person cov-
erage. 
‘‘(C) $2,250 in the case of family coverage. 
‘‘(c) ELIGIBLE SMALL EMPLOYER.—For purposes of 
this section— 
‘‘(1) IN
GENERAL.—The term ‘eligible small 
employer’ means, with respect to any taxable year, 
any employer who employed an average of 50 or 
fewer employees on business days during either of 
the 2 preceding taxable years. For purposes of the 
preceding sentence, a preceding taxable year may be 
taken into account only if the employer was in exist-
ence throughout such year. 
‘‘(2) EMPLOYERS NOT IN EXISTENCE IN PRE-
CEDING YEAR.—In the case of an employer which 
was not in existence throughout the 1st preceding 
taxable year, the determination under subparagraph 
(A) shall be based on the average number of employ-
ees that it is reasonably expected such employer will 
employ on business days in the current taxable year. 
‘‘(3) CERTAIN
GROWING
EMPLOYERS
RETAIN 
TREATMENT
AS
SMALL
EMPLOYER.—The term 
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‘small employer’ includes, with respect to any cal-
endar year, any employer if— 
‘‘(A) such employer met the requirement of 
paragraph (1) (determined without regard to 
paragraph (2)) for any preceding calendar year 
after the date of the enactment of this section, 
‘‘(B) such employer provided qualified 
health insurance for that year and each subse-
quent year thereafter, and 
‘‘(C) such employer employed an average 
of 200 or fewer employees on business days 
during each preceding calendar year after the 
date of the enactment of this section. 
‘‘(4) SPECIAL RULES.— 
‘‘(A) CONTROLLED
GROUPS.—For pur-
poses of this subsection, all persons treated as 
a single employer under subsection (b), (c), 
(m), or (o) of section 414 shall be treated as 1 
employer. 
‘‘(B) PREDECESSORS.—Any reference in 
this paragraph to an employer shall include a 
reference to any predecessor of such employer. 
‘‘(d) COVERAGE MONTH.—For purposes of this sec-
tion— 
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‘‘(1) IN GENERAL.—The term ‘coverage month’ 
means, with respect to an individual, any month if— 
‘‘(A) as of the first day of such month 
such individual is covered by qualified health in-
surance, and 
‘‘(B) more than 50 percent of the premium 
for coverage under such insurance for such 
month is paid by the eligible small employer. 
‘‘(2) MEDICARE, MEDICAID, AND SCHIP.—The 
term ‘coverage month’ shall not include any month 
with respect to an individual if, as of the first day 
of such month, such individual— 
‘‘(A) is entitled to any benefits under part 
A of title XVIII of the Social Security Act or 
is enrolled under part B of such title, or 
‘‘(B) is enrolled in the program under title 
XIX or XXI of such Act (other than under sec-
tion 1928 of such Act). 
‘‘(3) CERTAIN
OTHER
COVERAGE.—The term 
‘coverage month’ shall not include any month with 
respect to an individual if, at any time during such 
month, any benefit is provided to such individual 
under chapter 55 of title 10, United States Code. 
‘‘(4) PRISONERS.—The term ‘coverage month’ 
shall not include any month with respect to an indi-
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