Amends the Internal Revenue Code, the Employee Retirement and Income Security Act (ERISA), and the Patient Protection and Affordable Care Act to treat certain small employer benefit arrangements (SEBAs) as employers for the purpose of providing qualified retirement and accident and health plans or group-term life insurance.
Defines a SEBA as a member owned, democratically controlled cooperative organization that: (1) has at least 21 shareholders of whom 90% percent are in the same or similar line of business; (2) sponsors an accident and health plan for shareholder-members and any of their employees; (3) sponsors a qualified retirement plan meeting specified requirements and available to shareholder-members and their employees; (4) provides employee benefits pursuant to a written agreement; and (5) requires all benefit eligible employees of a shareholder-member to participate according to the same statutory eligibility criteria normally accorded them.
Treats the shareholder-members of a SEBA as employers for purposes of administering and allocating items of income, credits, deductions, or exclusions associated with the provision of employee benefits.
Prohibits treatment as a SEBA of any organization or related entity that is owned, in whole or in part, or managed or controlled in whole or in part, by any management agreement or certificates of indebtedness, directly or indirectly, or by: (1) any agents, brokers or providers of a health, life, or disability insurer; (2) a retirement plan service provider; (3) claim administrators; or (4) investment advisors.
Requires any group health plan established or maintained by a SEBA to be fully insured (thus prohibiting self-insurance).
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3249 Introduced in House (IH)]
112th CONGRESS
1st Session
H. R. 3249
To recognize small employer benefit arrangements as employers, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 24, 2011
Mr. Andrews introduced the following bill; which was referred to the
Committee on Education and the Workforce, and in addition to the
Committees on Ways and Means and Energy and Commerce, for a period to
be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To recognize small employer benefit arrangements as employers, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SMALL EMPLOYER BENEFIT ARRANGEMENTS.
(a) Amendments to IRC.--
(1) In general.--Section 414 of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
subsection:
``(y) Small Employer Benefit Arrangements.--
``(1) Treatment as employer.--
``(A) Retirement, accident, and health insurance.--
A small employer benefit arrangement meeting the
requirements of this subsection shall be treated as an
`employer' for the purpose of providing qualified
retirement and accident and health plans (including a
plan qualified under section 105(h) or section 125) or
group-term life insurance under section 79.
``(B) Allocation of income.--Notwithstanding
subparagraph (A), the shareholder-members of the small
employer benefit arrangement shall be treated as
employers for purposes of administering and allocating
items of income, credits, deductions, or exclusions
associated with the provision of employee benefits.
``(2) Certain organizations prohibited.--
``(A) In general.--An organization shall not be
treated as a small employer benefit arrangement if the
small employer benefit arrangement or any related
entity is owned, in whole or in part, or managed or
controlled in whole or in part, by any management
agreement or certificates of indebtedness, directly or
indirectly, or by an agents, brokers or providers of
a--
``(i) health, life, or disability insurer;
``(ii) retirement plan service provider
(including persons who provide plan design,
administration, and investment advice services
to retirement plans);
``(iii) claim administrators; and
``(iv) investment advisors.
``(B) Ordinary provision of products and
services.--Nothing in this paragraph shall be
construed--
``(i) to prohibit a small employer benefit
arrangement from contracting for the ordinary
provision of products and services from any
persons or organizations that might otherwise
be prohibited from having an ownership or
management interest in a small employer benefit
arrangement, or
``(ii) to prohibit small employer benefit
arrangements from creating, by and between
themselves, service organizations owned and
controlled exclusively by small employer
benefit arrangements to provide for such
products and services in the fulfillment of
their purposes.
``(3) Definition.--The term `small employer benefit
arrangement' means a member owned, democratically controlled
cooperative organization that--
``(A) meets the requirements of subchapter T;
``(B) has at least 21 shareholders of whom 90
percent are in the same or similar line of business;
``(C) sponsors an accident and health plan for
shareholder-members and any employees of shareholder-
members;
``(D) sponsors a qualified retirement plan that
meets the requirements of paragraph (12) or (13) of
section 401(k) and is available to shareholder-members
and any employees of shareholder-members;
``(E) provides employee benefits pursuant to a
written agreement; and
``(F) requires all benefit eligible employees of a
shareholder-member to participate according to the same
statutory eligibility criteria normally accorded such
persons.''.
(2) Effective date.--The amendments made by this subsection
shall apply with respect to plan years beginning on or after
the date of the enactment of this Act.
(b) Amendments to ERISA.--
(1) Treatment as employer.--Section 3 of the Employee
Retirement and Income Security Act (29 U.S.C. 1002) is
amended--
(A) in paragraph (5), by inserting ``or a small
employer benefit arrangement'' after ``a group or
association of employers''; and
(B) by adding at the end the following new
paragraph:
``(43) The term `small employer benefit arrangement' means a member
owned, democratically controlled cooperative organization that--
``(A) meets the requirements of subchapter T of chapter 1
of the Internal Revenue Code of 1986;
``(B) has at least 21 shareholders of whom 90 percent are
in the same or similar line of business;
``(C) sponsors an accident and health plan for shareholder-
members and any employees of shareholder-members;
``(D) sponsors a qualified retirement plan that meets the
requirements of paragraph (12) or (13) of section 401(k) of the
Internal Revenue Code of 1986 and is available to shareholder-
members and any employees of shareholder-members;
``(E) provides employee benefits pursuant to a written
agreement; and
``(F) requires all benefit eligible employees of a
shareholder-member to participate according to the same
statutory eligibility criteria normally accorded such
persons.''.
(2) Self-insurance prohibited.--Section 609 of such Act (29
U.S.C. 1169) is amended--
(A) by redesignating subsection (e) as subsection
(f); and
(B) by inserting after subsection (d) the following
new subsection:
``(e) Small Employer Benefit Arrangements.--
``(1) Self-insurance prohibited.--Any group health plan
established or maintained by a small employer benefit
arrangement shall be fully insured.
``(2) Fully insured defined.--A group health plan
established or maintained by a small employer benefit
arrangement shall be considered fully insured only if the terms
of the arrangement provide for benefits the amount of all of
which the Secretary determines are guaranteed under a contract,
or policy of insurance, issued by an insurance company,
insurance service, or insurance organization, qualified to
conduct business in a State.''.
(3) Effective date.--The amendments made by this subsection
shall apply with respect to plan years beginning on or after
the date of the enactment of this Act.
(c) Amendments to PPACA.--
(1) Small employer benefit arrangement defined.--Section
1304(b) of the Patient Protection and Affordable Care Act (42
U.S.C. 18024(b)) is amended by adding at the end the following
new paragraph:
``(5) Small employer benefit arrangement.--The term `small
employer benefit arrangement' has the meaning given such term
in section 3(43) of the Employee Retirement and Income Security
Act.''.
(2) Qualified health plans.--Section 1301(a) of such Act
(42 U.S.C. 18021(a)) is amended by adding at the end the
following new paragraph:
``(5) Inclusion of small employer benefit arrangement
plans.--Any reference in this title to a qualified health plan
shall be deemed to include any group health plan established or
maintained by a small employer benefit arrangement.''.
(3) Eligibility to participate in american health benefit
exchanges.--Section 1312(f)(2) of such Act (42 U.S.C.
18032(f)(2)) is amended by adding at the end the following new
subparagraph:
``(C) Small employer benefit arrangements.--For
purposes of subparagraph (A), a small employer benefit
arrangement shall be treated as a small employer.''.
(4) Effective date.--The amendments made to any provision
by this subsection shall take effect as if included in the
enactment of such provision.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Education and the Workforce, and in addition to the Committees on Ways and Means, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Education and the Workforce, and in addition to the Committees on Ways and Means, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Education and the Workforce, and in addition to the Committees on Ways and Means, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Health, Employment, Labor, and Pensions.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line