Employer credit for CHOICE arrangement

(a) In general Subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new section: 45BB. Employer credit for CHOICE arrangement (a) In general For purposes of section 38, in the case of an eligible employer, the CHOICE arrangement credit determined under this section for any taxable year is an amount, with respect to each employee enrolled during the credit period in a CHOICE arrangement maintained by the employer, equal to— (1) $100 multiplied by the number of months for which the employee is so enrolled during the first year in the credit period, and (2) one-half of the dollar amount in effect under paragraph (1) for the taxable year, multiplied by the number of months for which the employee is so enrolled during the second year of the credit period. (b) Arrangement must constitute minimum essential coverage An employee shall not be taken into account under subsection (a) unless such employee’s eligibility for the CHOICE arrangement (determined without regard to the employee being enrolled) would cause the employee to be treated under section 36B(c)(2) as being eligible for minimum essential coverage consisting of an eligible employer-sponsored plan (as defined in section 5000A(f)(2)). (c) Definitions For purposes of this section— (1) CHOICE arrangement The term CHOICE arrangement means a custom health option and individual care expense arrangement (as defined in section 9815(b)(2)(B)). (2) Credit period The credit period with respect to an eligible employer is the first 2 one-year periods beginning with the month during which the employer first establishes a CHOICE arrangement on behalf of employees of the employer. (3) Eligible employer The term eligible employer means, with respect to any taxable year beginning in a calendar year, an employer who is not an applicable large employer for the calendar year under section 4980H. (d) Inflation adjustment (1) In general In the case of any taxable year beginning in a calendar year after 2026, the dollar amount in subsection (a) shall be increased by an amount equal to— (A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which such taxable year begins by substituting calendar year 2025 for calendar year 2016 in subparagraph (A)(ii) thereof. (2) Rounding If any amount after adjustment under paragraph (1) is not a multiple of $10, such amount shall be rounded to the next lower multiple of $10.. (b) Credit made part of general business credit Section 38(b) is amended by striking plus at the end of paragraph (40), by striking the period at the end of paragraph (41) and inserting, plus, and by adding at the end the following new paragraph: (42) the CHOICE arrangement credit determined under section 45BB(a).. (c) Credit allowed against alternative minimum tax Section 38(c)(4)(B) is amended— (1) by redesignating clauses (x), (xi), and (xii) as clauses (xi), (xii), and (xiii), respectively, and (2) by inserting after clause (ix) the following new clause: (x) the credit determined under section 45BB,. (d) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item: Sec. 45BB. Employer credit for CHOICE arrangement.. (e) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2025.

(a) In general Subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new section: 45BB. Employer credit for CHOICE arrangement (a) In general For purposes of section 38, in the case of an eligible employer, the CHOICE arrangement credit determined under this section for any taxable year is an amount, with respect to each employee enrolled during the credit period in a CHOICE arrangement maintained by the employer, equal to— (1) $100 multiplied by the number of months for which the employee is so enrolled during the first year in the credit period, and (2) one-half of the dollar amount in effect under paragraph (1) for the taxable year, multiplied by the number of months for which the employee is so enrolled during the second year of the credit period. (b) Arrangement must constitute minimum essential coverage An employee shall not be taken into account under subsection (a) unless such employee’s eligibility for the CHOICE arrangement (determined without regard to the employee being enrolled) would cause the employee to be treated under section 36B(c)(2) as being eligible for minimum essential coverage consisting of an eligible employer-sponsored plan (as defined in section 5000A(f)(2)). (c) Definitions For purposes of this section— (1) CHOICE arrangement The term CHOICE arrangement means a custom health option and individual care expense arrangement (as defined in section 9815(b)(2)(B)). (2) Credit period The credit period with respect to an eligible employer is the first 2 one-year periods beginning with the month during which the employer first establishes a CHOICE arrangement on behalf of employees of the employer. (3) Eligible employer The term eligible employer means, with respect to any taxable year beginning in a calendar year, an employer who is not an applicable large employer for the calendar year under section 4980H. (d) Inflation adjustment (1) In general In the case of any taxable year beginning in a calendar year after 2026, the dollar amount in subsection (a) shall be increased by an amount equal to— (A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which such taxable year begins by substituting calendar year 2025 for calendar year 2016 in subparagraph (A)(ii) thereof. (2) Rounding If any amount after adjustment under paragraph (1) is not a multiple of $10, such amount shall be rounded to the next lower multiple of $10.. (b) Credit made part of general business credit Section 38(b) is amended by striking plus at the end of paragraph (40), by striking the period at the end of paragraph (41) and inserting, plus, and by adding at the end the following new paragraph: (42) the CHOICE arrangement credit determined under section 45BB(a).. (c) Credit allowed against alternative minimum tax Section 38(c)(4)(B) is amended— (1) by redesignating clauses (x), (xi), and (xii) as clauses (xi), (xii), and (xiii), respectively, and (2) by inserting after clause (ix) the following new clause: (x) the credit determined under section 45BB,. (d) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item: Sec. 45BB. Employer credit for CHOICE arrangement.. (e) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2025.