I 
113TH CONGRESS 
1ST SESSION H. R. 3046 
To amend the Internal Revenue Code of 1986 to expand and simplify the 
credit for employee health insurance expenses of small employers. 
IN THE HOUSE OF REPRESENTATIVES 
AUGUST 2, 2013 
Mr. PALLONE 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 expand 
and simplify the credit for employee health insurance 
expenses of small employers. 
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 Tax Credit Improvement Act of 2013’’. 
SEC. 2. EXPANSION AND SIMPLIFICATION OF CREDIT FOR 
EMPLOYEE HEALTH INSURANCE EXPENSES 
OF SMALL EMPLOYERS. 
(a) INCREASE IN MAXIMUM NUMBER OF ELIGIBLE 
FULL-TIME EMPLOYEES.—Subparagraph (A) of section 
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45R(d)(1) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘25 full-time equivalent employees’’ 
and inserting ‘‘50 full-time equivalent employees’’. 
(b) MODIFICATION
OF
PHASEOUT
OF
CREDIT 
AMOUNT.— 
(1) IN
GENERAL.—Subsection (c) of section 
45R of such Code is amended to read as follows: 
‘‘(c) PHASEOUT
OF CREDIT AMOUNT BASED
ON 
NUMBER OF EMPLOYEES AND AVERAGE WAGES.— 
‘‘(1) IN GENERAL.—The amount of the credit 
determined under subsection (b) shall be adjusted by 
multiplying— 
‘‘(A) the amount determined under sub-
section (b), by 
‘‘(B) the product of the amount deter-
mined under paragraph (2) and the amount de-
termined under paragraph (3). 
‘‘(2) EMPLOYEE
ADJUSTMENT.—The amount 
determined under this paragraph is a fraction (not 
more than 1) the numerator of which is the number 
by which the total number of full-time equivalent 
employees of the eligible employer is less than 50 
and the denominator of which is 30. 
‘‘(3) WAGES ADJUSTMENT.—The amount deter-
mined under this paragraph is a fraction (not more 
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than 1) the numerator of which is the amount by 
which the average annual wages of the eligible em-
ployer is less than twice the dollar amount in effect 
under subsection (d)(3)(B) and the denominator of 
which is such dollar amount.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Subsection (a) of section 45R of such 
Code is amended by inserting ‘‘, as adjusted 
under subsection (c)’’ after ‘‘the amount deter-
mined under subsection (b)’’. 
(B) Subsection (b) of section 45R of such 
Code is amended by striking ‘‘Subject to sub-
section (c), the’’ and inserting ‘‘The’’. 
(C) 
Subparagraph 
(B) 
of 
section 
45R(d)(3) of such Code is amended by striking 
‘‘subsection (c)(2)’’ and inserting ‘‘subsection 
(c)(3)’’. 
(c) AVERAGE
ANNUAL
WAGE
LIMITATION
IN-
CREASE.— 
(1) 2012 AND
2013.—Clause (i) of section 
45R(d)(3)(B) of such Code is amended to read as 
follows: 
‘‘(i) 2010, 2011, 2012, AND 2013.—The 
dollar amount in effect under this para-
graph is— 
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‘‘(I) for taxable years beginning 
in 2010, 2011, or 2012, $25,000, and 
‘‘(II) for taxable years beginning 
in 2013, $28,500.’’. 
(2) SUBSEQUENT YEARS.—Clause (ii) of section 
45R(d)(3)(B) of such Code is amended by striking 
‘‘$25,000’’ and inserting ‘‘$28,500’’. 
(d) REPEAL
OF UNIFORMITY REQUIREMENT
FOR 
CONTRIBUTIONS.—Paragraph (4) of section 45R(d) of 
such Code is amended— 
(1) by striking ‘‘in an amount equal to a uni-
form percentage (not less than 50 percent) of the 
premium cost of the qualified health plan’’, and 
(2) by inserting ‘‘(in an amount not less than 
50 percent of the premium cost of the qualified 
health plan)’’ after ‘‘nonelective contribution’’. 
(e) REPEAL OF LIMITATION BASED ON STATE AVER-
AGE PREMIUMS.— 
(1) IN
GENERAL.—Subsection (b) of section 
45R of such Code is amended to read as follows: 
‘‘(b) HEALTH INSURANCE CREDIT AMOUNT.—Sub-
ject to subsection (c), the amount determined under this 
subsection with respect to any eligible small employer is 
equal to 50 percent (35 percent in the case of a tax-exempt 
eligible small employer) of the aggregate amount of non-
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