coverage consisting of coverage under any quali-
fied small employer health reimbursement ar-
rangement (as defined in section 9831(d)(2)), 
the cost of coverage shall be equal to the 
amount described in section 6051(a)(15).’’. 
(5) 
ENFORCEMENT
OF
NOTICE
REQUIRE-
MENT.—Section 6652 of such Code is amended by 
adding at the end the following new subsection: 
‘‘(o) FAILURE TO PROVIDE NOTICES WITH RESPECT 
TO QUALIFIED SMALL EMPLOYER HEALTH REIMBURSE-
MENT ARRANGEMENTS.—In the case of each failure to 
provide a written notice as required by section 9831(d)(4), 
unless it is shown that such failure is due to reasonable 
cause and not willful neglect, there shall be paid, on notice 
and demand of the Secretary and in the same manner as 
tax, by the person failing to provide such written notice, 
an amount equal to $50 per employee per incident of fail-
ure to provide such notice, but the total amount imposed 
on such person for all such failures during any calendar 
year shall not exceed $2,500.’’. 
(6) REPORTING.— 
(A) W–2 REPORTING.—Section 6051(a) of 
such Code is amended by striking ‘‘and’’ at the 
end of paragraph (13), by striking the period at 
the end of paragraph (14) and inserting ‘‘,
and’’, and by inserting after paragraph (14) the 
following new paragraph: 
‘‘(15) the total amount of permitted benefit (as 
defined in section 9831(d)(3)(C)) for the year under 
a qualified small employer health reimbursement ar-
rangement (as defined in section 9831(d)(2)) with 
respect to the employee.’’. 
(B) INFORMATION REQUIRED TO BE PRO-
VIDED BY EXCHANGE SUBSIDY APPLICANTS.— 
Section 1411(b)(3) of the Patient Protection 
and Affordable Care Act is amended by redesig-
nating subparagraph (B) as subparagraph (C) 
and by inserting after subparagraph (A) the fol-
lowing new subparagraph: 
‘‘(B) CERTAIN
INDIVIDUAL
HEALTH
IN-
SURANCE POLICIES OBTAINED THROUGH SMALL 
EMPLOYERS.—The amount of the enrollee’s 
permitted 
benefit 
(as 
defined 
in 
section 
9831(d)(3)(C) of the Internal Revenue Code of 
1986) under a qualified small employer health 
reimbursement arrangement (as defined in sec-
tion 9831(d)(2) of such Code).’’. 
(7) EFFECTIVE DATES.— 
(A) IN
GENERAL.—Except as otherwise 
provided in this paragraph, the amendments
made by this subsection shall apply to years be-
ginning after the earlier of— 
(i) the date that is 90 days after the 
date of the enactment of this Act, or 
(ii) December 31, 2016. 
(B) 
TRANSITION
RELIEF.—The 
relief 
under Treasury Notice 2015–17 shall be treat-
ed as applying to any plan year beginning on or 
before the date described in subparagraph (A). 
(C) COORDINATION WITH HEALTH INSUR-
ANCE
PREMIUM
CREDIT.—The amendments 
made by paragraph (3) shall apply to taxable 
years beginning after the date described in sub-
paragraph (A). 
(D) EMPLOYEE
NOTICE.—The amend-
ments made by paragraph (5) shall apply to no-
tices with respect to years beginning after the 
date described in subparagraph (A). 
(E) W–2 REPORTING.—The amendments 
made by paragraph (6)(A) shall apply to cal-
endar years beginning after December 31, 
2016. 
(F) INFORMATION
PROVIDED
BY
EX-
CHANGE SUBSIDY APPLICANTS.—
(i) IN
GENERAL.—The amendments 
made by paragraph (6)(B) shall apply to 
applications for enrollment made after the 
date described in subparagraph (A). 
(ii) 
VERIFICATION.—Verification 
under section 1411 of the Patient Protec-
tion and Affordable Care Act of informa-
tion provided under section 1411(b)(3)(B) 
of such Act shall apply with respect to 
months beginning after October 2016. 
(8) 
SUBSTANTIATION
REQUIREMENTS.—The 
Secretary of the Treasury (or his designee) may 
issue substantiation requirements as necessary to 
carry out this subsection. 
(b) AMENDMENTS TO THE EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.— 
(1) IN
GENERAL.—Section 733(a)(1) of the 
Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1191b(a)(1)) is amended by adding at 
the end the following: ‘‘Such term shall not include 
any qualified small employer health reimbursement 
arrangement (as defined in section 9831(d)(2) of the 
Internal Revenue Code of 1986).’’. 
(2) EXCEPTION
FROM
CONTINUATION
COV-
ERAGE
REQUIREMENTS, ETC.—Section 607(1) of
such Act (29 U.S.C. 1167(1)) is amended by adding 
at the end the following: ‘‘Such term shall not in-
clude any qualified small employer health reimburse-
ment arrangement (as defined in section 9831(d)(2) 
of the Internal Revenue Code of 1986).’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to plan years begin-
ning after the date described in subsection (a)(7)(A). 
(c) AMENDMENTS TO THE PUBLIC HEALTH SERVICE 
ACT.— 
(1) IN GENERAL.—Section 2791(a)(1) of the 
Public Health Service Act (42 U.S.C. 300gg– 
91(a)(1)) is amended by adding at the end the fol-
lowing: ‘‘Except for purposes of part C of title XI 
of the Social Security Act (42 U.S.C. 1320d et seq.), 
such term shall not include any qualified small em-
ployer health reimbursement arrangement (as de-
fined in section 9831(d)(2) of the Internal Revenue 
Code of 1986).’’. 
(2) EXCEPTION
FROM
CONTINUATION
COV-
ERAGE
REQUIREMENTS.—Section 2208(1) of the 
Public Health Service Act (42 U.S.C. 300bb–8(1)) is 
amended by adding at the end the following: ‘‘Such 
term shall not include any qualified small employer 
health reimbursement arrangement (as defined in
section 9831(d)(2) of the Internal Revenue Code of 
1986).’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to plan years begin-
ning after the date described in subsection (a)(7)(A). 
Passed the House of Representatives June 21, 2016. 
Attest: 
Clerk.
114TH CONGRESS 
2D SESSION 
H. R. 5447 
AN ACT 
To provide an exception from certain group health 
plan requirements for qualified small employer 
health reimbursement arrangements.