New Hampshire Senate Bill SB635

New Hampshire 2026 Regular Session

• Introduced: 11/25/25
• Refer: 11/25/25
• Report Pass: 2/20/26

Caption

(New Title) establishing a health reimbursement arrangement tax credit program and making an appropriation for improvements in the department of revenue administration's information management system.

Summary

SB 635 establishes a new state tax credit program for employers that adopt a health reimbursement arrangement (HRA) instead of a traditional employer-sponsored health insurance plan. The bill defines a “qualified taxpayer” as a business entity with more than one employee and state tax liability that has implemented an HRA, and it defines “qualified contributions” and “qualified accounts” by reference to federal law and regulations. Eligible employers could claim a credit for contributions made to covered employees’ HRAs, including reimbursements for eligible medical expenses and individual health insurance premiums. The credit is structured to be temporary and capped. For the first year, the credit would be up to $400 per covered employee, subject to a $20,000 cap per taxpayer; in the second year, it would drop to $200 per covered employee and a $10,000 cap per taxpayer. Across all taxpayers, total credits would be limited to $10 million per taxable year, and the Department of Revenue Administration would have to process claims in filing order until the annual cap is reached. The bill also allows unused credits to be carried forward for up to three years, but not refunded or carried back. The new credit would be applied against the business profits tax and business enterprise tax, and the bill would take effect July 1, 2026, applying to taxable periods ending on or after December 31, 2027.

Impact

The bill would add a new chapter to the state tax code, RSA chapter 77-H, and amend the business profits tax and business enterprise tax statutes to allow the HRA credit to offset liability under those taxes. It would create new administrative duties for the Department of Revenue Administration, including rulemaking, claim processing, and tracking the statewide annual cap. The measure would also indirectly affect employers that currently offer or are considering switching to HRAs, since the credit is conditioned on maintaining contribution levels comparable to prior coverage or prior employer contributions.

Sentiment

Based on the available record, the bill appears to have been introduced with support from a bipartisan group of Senate and House sponsors and was referred to the Senate Ways and Means Committee. No committee transcript or recorded vote is provided, so there is no documented floor debate or formal vote history to gauge broader sentiment. The bill’s structure suggests a policy goal of encouraging employer adoption of HRAs while limiting fiscal exposure through per-employee, per-taxpayer, and statewide caps.

Contention

The main policy tension is between encouraging more flexible, lower-cost employer health coverage and the potential loss of state tax revenue. Supporters are likely to view the credit as a way to expand employer health benefit options and help businesses transition to HRAs, while critics may question whether the credit subsidizes private coverage choices without guaranteeing broader coverage gains. Additional points of concern include the annual $10 million cap, the short two-year credit schedule, the administrative burden on the revenue department, and the bill’s reliance on federal HRA rules that may be complex for employers to navigate.