Page:United States Statutes at Large Volume 124.djvu/264

 124 STAT. 238 PUBLIC LAW 111–148—MAR. 23, 2010 related credits) is amended by inserting after section 45Q the fol- lowing: ‘‘SEC. 45R. EMPLOYEE HEALTH INSURANCE EXPENSES OF SMALL EMPLOYERS. ‘‘(a) GENERAL RULE.—For purposes of section 38, in the case of an eligible small employer, the small employer health insurance credit determined under this section for any taxable year in the credit period is the amount determined under subsection (b). ‘‘(b) HEALTH INSURANCE CREDIT AMOUNT.—Subject to sub- section (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 lesser of— ‘‘(1) the aggregate amount of nonelective contributions the employer made on behalf of its employees during the taxable year under the arrangement described in subsection (d)(4) for premiums for qualified health plans offered by the employer to its employees through an Exchange, or ‘‘(2) the aggregate amount of nonelective contributions which the employer would have made during the taxable year under the arrangement if each employee taken into account under paragraph (1) had enrolled in a qualified health plan which had a premium equal to the average premium (as deter- mined by the Secretary of Health and Human Services) for the small group market in the rating area in which the employee enrolls for coverage. ‘‘(c) PHASEOUT OF CREDIT AMOUNT BASED ON NUMBER OF EMPLOYEES AND AVERAGE WAGES.—The amount of the credit deter- mined under subsection (b) without regard to this subsection shall be reduced (but not below zero) by the sum of the following amounts: ‘‘(1) Such amount multiplied by a fraction the numerator of which is the total number of full-time equivalent employees of the employer in excess of 10 and the denominator of which is 15. ‘‘(2) Such amount multiplied by a fraction the numerator of which is the average annual wages of the employer in excess of the dollar amount in effect under subsection (d)(3)(B) and the denominator of which is such dollar amount. ‘‘(d) ELIGIBLE SMALL EMPLOYER.—For purposes of this section— ‘‘(1) IN GENERAL.—The term ‘eligible small employer’ means, with respect to any taxable year, an employer— ‘‘(A) which has no more than 25 full-time equivalent employees for the taxable year, ‘‘(B) the average annual wages of which do not exceed an amount equal to twice the dollar amount in effect under paragraph (3)(B) for the taxable year, and ‘‘(C) which has in effect an arrangement described in paragraph (4). ‘‘(2) FULL-TIME EQUIVALENT EMPLOYEES.— ‘‘(A) IN GENERAL.—The term ‘full-time equivalent employees’ means a number of employees equal to the number determined by dividing— ‘‘(i) the total number of hours of service for which wages were paid by the employer to employees during the taxable year, by ‘‘(ii) 2,080. 26 USC 45R.