Small Business Health Care Affordability Act of 2009 - Amends the Internal Revenue Code to allow certain small employers (generally, employers of 50 or fewer employees) and their employees tax credits for health insurance costs.
[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3115 Introduced in House (IH)]
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 Representatives 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 PROVIDING EMPLOYEE HEALTH
INSURANCE.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 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 insurance 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
qualified 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 coverage 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:
``(A) $1,000 in the case of coverage of the
employee.
``(B) $1,750 in the case of two person coverage.
``(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 existence throughout
such year.
``(2) Employers not in existence in preceding 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
employees 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 `small employer' includes, with respect to
any calendar 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 subsequent 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 purposes 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 section--
``(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 insurance,
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 section 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 individual if, as of the
first day of such month, such individual is imprisoned under
Federal, State, or local authority.
``(5) Insufficient presence in united states.--The term
`coverage month' shall not include any month during a taxable
year with respect to an individual if such individual is
present in the United States on fewer than 183 days during such
year (determined in accordance with section 7701(b)(7)).
``(e) Qualified Health Insurance.--For purposes of this section--
``(1) In general.--The term `qualified health insurance'
means health insurance coverage (as defined in section
9832(b)(1)) which--
``(A) is coverage under a group health plan (within
the meaning of section 5000 without regard to section
5000(d)), and
``(B) meets the requirements of
paragraph (2).
Such term does not include any insurance substantially all of
the coverage of which is coverage described in section
223(c)(1)(B).
``(2) Requirements.--The requirements of this paragraph are
as follows:
``(A) Adjusted community rating or rating bands.--
The coverage is provided in a State which--
``(i) has a community rating structure that
does not permit rating on gender, health status
or claims experience, or
``(ii) limits the permitted rate for any
age group to be no more than 400 percent of the
lowest rate for all adult age groups.
``(B) Benefits.--The coverage is provided under a
plan that is at least an actuarial equivalent to the
standard Blue Cross-Blue Shield plan offered under the
Federal Employees Health Benefits Program (FEHBP).''.
(b) Credit Allowed as Part of General Business Credit.--Section
38(b) of such Code (defining current year business credit) is amended
by striking ``plus'' at the end of paragraph (34), by striking the
period at the end of paragraph (35) and inserting ``, plus'', and by
adding at the end the following new paragraph:
``(36) in the case of an eligible small employer (as
defined in section 45R(c)), the health insurance credit
determined under section 45R(a).''.
(c) Conforming Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of such Code is amended by adding
at the end the following new item:
``Sec. 45R. Employee health insurance coverage by small employers.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2009.
SEC. 3. REFUNDABLE SMALL BUSINESS EMPLOYEE HEALTH PREMIUM CREDIT.
(a) Allowance of Credit.--
(1) In general.--Subpart C of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
refundable personal credits) is amended by inserting after
section 36A the following new section:
``SEC. 36B. HEALTH INSURANCE COSTS FOR SMALL BUSINESS EMPLOYEES.
``(a) Allowance of Credit.--In the case of an individual who is an
eligible small business employee, there shall be allowed as a credit
against the tax imposed by this subtitle for the taxable year an amount
equal to the amount paid by the taxpayer during such taxable year for
qualified health insurance for the taxpayer and the taxpayer's spouse
and dependents.
``(b) Limitation.--The amount allowed as a credit under subsection
(a) to the taxpayer for the taxable year shall not exceed the sum of
the amounts paid by the taxpayer for qualified health insurance for
each individual referred to in subsection (a) for coverage months of
such individual during the taxable year.
``(c) Eligible Small Business Employee.--For purposes of this
section, an individual is an eligible small business employee for a
coverage month if such individual is enrolled in qualified health
insurance provided through an eligible small employer for which a
credit is allowable under section 45R.
``(d) Qualified Health Insurance; Coverage Month.--For purposes of
this section, the terms `qualified health insurance' and `coverage
month' have the same meanings given such terms by section 45R.
``(e) Special Rules.--
``(1) Coordination with medical expense deduction.--The
amount which would (but for this paragraph) be taken into
account by the taxpayer under section 213 for the taxable year
shall be reduced by the credit (if any) allowed by this section
to the taxpayer for such year.
``(2) Coordination with deduction for health insurance
costs of self-employed individuals.--No credit shall be
allowable under this section for a taxable year if a deduction
is allowed under section 162(l) for the taxable year.
``(3) Coordination with section 35.--If a taxpayer is
eligible for the credit allowed under this section and section
35 for any month, the taxpayer shall elect which credit is to
be allowed with respect to such month.
``(f) Regulations.--The Secretary shall prescribe such regulations
as may be necessary to carry out the purposes of this section.''.
(b) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``36B,'' after ``36A,''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by inserting after the item relating to section 36A
the following new item:
``Sec. 36B. Health insurance costs for small business employees.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2009.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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