I 
114TH CONGRESS 
1ST SESSION H. R. 2911 
To provide an exception from certain group health plan requirements to 
allow small businesses to use pre-tax dollars to assist employees in 
the purchase of policies in the individual health insurance market, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 25, 2015 
Mr. BOUSTANY (for himself and Mr. THOMPSON of California) introduced the 
following bill; which was referred to the Committee on Ways and Means, 
and in addition to the Committees on Energy and Commerce and Edu-
cation and the Workforce, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned 
A BILL 
To provide an exception from certain group health plan re-
quirements to allow small businesses to use pre-tax dol-
lars to assist employees in the purchase of policies in 
the individual health insurance market, 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’’. 
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SEC. 2. EXCEPTION FROM GROUP HEALTH PLAN REQUIRE-
MENTS TO ALLOW SMALL BUSINESSES TO 
USE PRE-TAX DOLLARS TO ASSIST EMPLOY-
EES IN THE PURCHASE OF HEALTH INSUR-
ANCE IN THE INDIVIDUAL MARKET. 
(a) AMENDMENTS
TO
THE INTERNAL REVENUE 
CODE OF 1986 AND THE PATIENT PROTECTION AND AF-
FORDABLE CARE ACT.— 
(1) IN GENERAL.—Section 9831 of the Internal 
Revenue Code of 1986 is amended by adding at the 
end the following new subsection: 
‘‘(d) CERTAIN
INDIVIDUAL
HEALTH
INSURANCE 
POLICIES OBTAINED THROUGH SMALL EMPLOYERS.— 
‘‘(1) IN GENERAL.—The requirements of this 
chapter shall not apply to any qualified small em-
ployer health reimbursement arrangement. 
‘‘(2) QUALIFIED
SMALL
EMPLOYER
HEALTH 
REIMBURSEMENT ARRANGEMENT.—For purposes of 
this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
small employer health reimbursement arrange-
ment’ means an arrangement which— 
‘‘(i) is described in subparagraph (B), 
and 
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‘‘(ii) is offered on the same terms to 
all eligible employees of the eligible em-
ployer. 
‘‘(B) ARRANGEMENT DESCRIBED.—An ar-
rangement is described in this subparagraph 
if— 
‘‘(i) such arrangement is funded solely 
by an eligible employer and no salary re-
duction contributions may be made under 
such arrangement, and 
‘‘(ii) such arrangement provides, after 
the employee provides proof of coverage to 
the employer, for the payment of, or reim-
bursement of, an eligible employee for— 
‘‘(I) expenses for medical care 
(as defined by subparagraphs (A), 
(B), and (C) section 213(d)) incurred 
by the eligible employee or the eligible 
employee’s family members (as deter-
mined under the terms of the arrange-
ment), and 
‘‘(II) including for— 
‘‘(aa) insurance (within the 
meaning of section 213(d)(1)(D)) 
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purchased 
on 
the 
individual 
health insurance market, and 
‘‘(bb) premiums under part 
B of title XVIII of the Social Se-
curity Act and any medicare sup-
plemental policy under section 
1882 of such Act. 
‘‘(C) PAYMENTS FOR OTHER INSURANCE 
NOT
PERMITTED
UNDER
ARRANGEMENT.—An 
arrangement shall not be treated as described 
in subparagraph (B) if the arrangement per-
mits the employee to pay premiums for health 
insurance coverage for the employee under the 
employee’s spouse or other family member 
health insurance coverage. 
‘‘(D) CERTAIN VARIATION PERMITTED.— 
For purposes of subparagraph (A)(ii), an ar-
rangement shall not fail to be treated as offered 
on the same terms to all eligible employees 
merely because the employer contributions 
under such arrangement vary based on the 
number of individuals covered under such pol-
icy. The preceding sentence shall not apply un-
less such variation is consistently applied to all 
eligible employees and is consistent with the 
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price variation of coverage under health insur-
ance obtained in the relevant individual health 
insurance market. 
‘‘(3) OTHER
DEFINITIONS.—For purposes of 
this subsection— 
‘‘(A) ELIGIBLE EMPLOYEE.—The term ‘eli-
gible employee’ means any employee of the em-
ployer except that the terms of the arrangement 
may exclude from consideration employees de-
scribed in any clause of section 105(h)(3)(B) 
(applied by substituting ‘90 days’ for ‘3 years’ 
in clause (i) thereof). 
‘‘(B) ELIGIBLE EMPLOYER.—The term ‘el-
igible employer’ means an employer that— 
‘‘(i) is not an applicable large em-
ployer as defined in section 4980H(c)(2), 
and 
‘‘(ii) does not offer a group health 
plan (other than a qualified small employer 
health reimbursement arrangement) to any 
of its employees. 
‘‘(C) INDIVIDUAL
HEALTH
INSURANCE 
POLICY.—The term ‘individual health insurance 
policy’ means individual health insurance cov-
erage (as defined in section 2791(b) of the Pub-
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lic Health Service Act) which is offered by a 
health insurance issuer (as so defined in such 
section).’’. 
(2) EXCLUSION FROM GROSS INCOME.—Section 
106 of such Code is amended by adding at the end 
the following: 
‘‘(g) QUALIFIED SMALL EMPLOYER HEALTH REIM-
BURSEMENT ARRANGEMENT.— 
‘‘(1) IN GENERAL.—In the case of an individual 
who is an eligible employee (as defined in paragraph 
(3)(A) of section 9831(d)) with respect to an eligible 
employer (as defined in paragraph (3)(B) of such 
section), the applicable percentage of the aggregate 
contributions made for the taxable year by the eligi-
ble employer under a qualified small employer health 
reimbursement arrangement (as defined in para-
graph (2) of such section) with respect to the em-
ployee shall be treated as employer-provided cov-
erage for medical expenses under an accident or 
health plan. 
‘‘(2) APPLICABLE PERCENTAGE.—For purposes 
of paragraph (1) the applicable percentage shall 
be— 
‘‘(A) 25 percent if the employee is covered 
for less than 3 months in the taxable year by 
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‘‘(D) In the case of applicable employer- 
sponsored coverage consisting of coverage under 
any qualified small employer health reimburse-
ment arrangement (as defined in section 
9831(d)(2)), the cost of the coverage shall be 
the 
amount 
reported 
under 
section 
6051(a)(15).’’. 
(5) PREVENTION OF DOUBLE BENEFIT UNDER 
HEALTH
INSURANCE
PREMIUM
CREDIT.—Section 
36B(c)(2) of such Code is amended by adding at the 
end the following new subparagraph: 
‘‘(E) SPECIAL RULE FOR CERTAIN INDI-
VIDUAL
HEALTH
INSURANCE
POLICIES
OB-
TAINED THROUGH SMALL EMPLOYERS.— 
‘‘(i) IN
GENERAL.—The term ‘cov-
erage month’ shall not include any month 
with respect to an employee if for such 
month the employee is offered affordable 
coverage under an individual health insur-
ance policy (as defined under section 
9831(d)(3)(C)) under a qualified small em-
ployer health reimbursement arrangement 
(as defined in section 9831(d)(2)). 
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‘‘(ii) AFFORDABLE.—For purposes of 
clause (i), coverage shall be treated as af-
fordable for a month if— 
‘‘(I) 1⁄12 of the employer’s con-
tribution to the employee for a year 
under such arrangement is not less 
than the amount that would be paid 
by the employee for the premium for 
such month for the applicable second 
lowest cost self-only silver plan for 
self-only coverage with respect to the 
employee’s individual market, and 
‘‘(II) the employee’s cost for cov-
erage under the individual health in-
surance policy under the qualified 
small employer health reimbursement 
arrangement for a year does not ex-
ceed the 9.5 percent of the employee’s 
household income.’’. 
(6) EMPLOYEE
NOTICE.—Section 101 of the 
Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1021) is amended by adding at the end 
the following: 
‘‘(o) NOTICE RELATING TO HEALTH REIMBURSE-
MENT
ARRANGEMENTS.—An employer maintaining a 
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qualified small employer health reimbursement arrange-
ment (as defined in section 9831(d)(2) of the Internal 
Revenue Code of 1986) shall, upon an election by an em-
ployee to participate in such qualified small employer 
health reimbursement arrangement, provide notice to the 
employee that if the employee is not covered under such 
arrangement for at least 9 of 12 months in the plan year, 
any funds under such arrangement may be includible in 
gross income.’’. 
(7) 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 employer contribu-
tions made for the year under a qualified small em-
ployer health reimbursement arrangement (as de-
fined in section 9831(d)(2)) with respect to the em-
ployee.’’. 
(B) INFORMATION REQUIRED TO BE PRO-
VIDED BY EXCHANGE SUBSIDY APPLICANTS.— 
(i) IN GENERAL.—Section 1411(b)(3) 
of the Patient Protection and Affordable 
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Care Act is amended by redesignating sub-
paragraph (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 months (if any) which the 
enrollee has or expects to have coverage under 
an individual health insurance policy (as de-
fined in section 9831(d)(3)(C) of the Internal 
Revenue Code of 1986) provided under a quali-
fied small employer health reimbursement ar-
rangement (as defined in section 9831(d)(2) of 
such Code).’’. 
(ii) SPECIAL
RULE
RELATING
TO 
VERIFICATION OF INFORMATION REQUIRED 
TO
BE
PROVIDED
BY
EXCHANGE
APPLI-
CANTS.—Verification under section 1411 
of the Patient Protection and Affordable 
Care Act of information provided under 
section 1411(b)(3)(B) of such Act shall 
apply with respect to months beginning 
after October 2016. 
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(8) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to months beginning 
after the date of the enactment of this Act. 
(b) AMENDMENTS TO THE EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.— 
(1) IN GENERAL.—Section 732 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 
1191a) is amended by redesignating subsection (d) 
as subsection (e) and by inserting after subsection 
(c) the following new subsection: 
‘‘(d) EXCEPTION FOR CERTAIN INDIVIDUAL HEALTH 
INSURANCE POLICIES OBTAINED THROUGH SMALL EM-
PLOYERS.—The requirements of this part shall not apply 
to any qualified small employer health reimbursement ar-
rangement (as defined in section 9831(d)(2) of the Inter-
nal Revenue Code of 1986).’’. 
(2) EXCEPTION
FROM
CONTINUATION
COV-
ERAGE REQUIREMENTS.—Section 601 of such Act 
(29 U.S.C. 1161) is amended by adding at the end 
the following new subsection: 
‘‘(c) EXCEPTION FOR CERTAIN INDIVIDUAL HEALTH 
INSURANCE POLICIES OBTAINED THROUGH SMALL EM-
PLOYERS.—Subsection (a) shall not apply to any qualified 
small employer health reimbursement arrangement (as de-
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fined in section 9831(d)(2) of the Internal Revenue Code 
of 1986).’’. 
(3) EXCEPTION FROM CERTAIN OTHER GROUP 
HEALTH
PLAN
REQUIREMENTS.—Section 609 of 
such Act (29 U.S.C. 1169) is amended by redesig-
nating subsection (e) as subsection (f) and by insert-
ing after subsection (d) the following new sub-
section: 
‘‘(e) EXCEPTION FOR CERTAIN INDIVIDUAL HEALTH 
INSURANCE POLICIES OBTAINED THROUGH SMALL EM-
PLOYERS.—The requirements of this section shall not 
apply to any qualified small employer health reimburse-
ment arrangement (as defined in section 9831(d)(2) of the 
Internal Revenue Code of 1986).’’. 
(4) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to months beginning 
after the date of the enactment of this Act. 
(c) AMENDMENTS
TO PUBLIC HEALTH SERVICE 
ACT.— 
(1) IN GENERAL.—Part C of title XXVII of the 
Public Health Service Act (42 U.S.C. 300gg–91 et 
seq.) is amended by adding at the end the following 
new section: 
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