Health Benefits for Small Businesses and Their Employees Act of 1992

Health Benefits for Small Businesses and Their Employees Act of 1992 - Amends the Internal Revenue Code to treat partners and certain shareholders of subchapter S corporations (certain small businesses) so as to exclude from gross income contributions by the partnership or S corporation to an accident or health plan for such partners and shareholders and their employees.

 
HR 4543 IH
102d CONGRESS
2d Session
 H. R. 4543
To amend the Internal Revenue Code of 1986 to allow partners and certain
shareholders of subchapter S corporations to exclude from gross income
contributions by the partnership or S corporation to an accident or health
plan for such partners and shareholders and their employees.
IN THE HOUSE OF REPRESENTATIVES
March 24, 1992
Mr. ATKINS (for himself and Mr. DONNELLY) 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 partners and certain
shareholders of subchapter S corporations to exclude from gross income
contributions by the partnership or S corporation to an accident or health
plan for such partners and shareholders and their employees.
  Be it enacted by the Senate and House of Representatives of the United
  States of America in Congress assembled,
SECTION 1. SHORT TITLE.
  This Act may be cited as the `Health Benefits for Small Businesses and
  Their Employees Act of 1992'.
SEC. 2. EXCLUSION FROM GROSS INCOME FOR CONTRIBUTIONS BY S CORPORATION OF
PARTNERSHIP TO HEALTH PLAN COVERING ITS PARTNERS OR SHAREHOLDERS.
  (a) S CORPORATIONS- Section 1372 of the Internal Revenue Code of 1986
  (relating to partnership rules to apply for fringe benefit purposes)
  is amended--
  (1) in subsection (a), in the matter preceding paragraph (1), by striking
  `fringe benefits' and inserting `fringe benefits, except as provided in
  subsection (c)', and
  (2) by adding at the end thereof the following new subsection:
  `(c) Exception for Coverage Provided Under Subsidized Accident or Health
  Plan-
  `(1) IN GENERAL- This section shall not apply to coverage under a subsidized
  accident or health plan maintained by the S corporation for its full-time
  employees.
  `(2) FULL-TIME EMPLOYEE- For purposes of this subsection, the term `full-time
  employee' means, with respect to an employer, an individual who normally
  performs on a monthly basis at least 30 hours of service per week for
  that employer.'
  (b) PARTNERSHIPS- Section 707 of such Code (relating to transactions
  between partners and partnerships) is amended by adding at the end thereof
  the following new subsection:
  `(d) Exclusion for Coverage Provided Under Subsidized Accident or Health
  Plan-
  `(1) IN GENERAL- In the case of coverage under a subsidized accident or
  health plan maintained by a partnership for its partners and full-time
  employees, for purposes of sections 104, 105, 106, and 162(1)(2)(B),
  the partnership shall be treated as the employer of each partner who is
  an employee within the meaing of section 401(c)(1).
  `(2) FULL-TIME EMPLOYEE- For purposes of this subsection, the term
  `full-time employee' has the meaning given such term by section 1372(c)(2).'
  (c) EFFECTIVE DATE- The amendments made by this section shall apply to
  taxable years beginning after December 31, 1990.