To amend sections 3901.21, 3901.22, 3937.19, and 5747.98 and to enact section 5747.87 of the Revised Code to authorize a nonrefundable income tax credit for small employers that cover their employees with an individual coverage health reimbursement arrangement and to prohibit certain acts or practices intended to steer an individual away from employer-provided insurance.
Summary
HB133 would create a new nonrefundable Ohio income tax credit for small employers that offer employees an individual coverage health reimbursement arrangement (ICHRA). The credit is available to employers with more than one and fewer than 51 employees that provide an ICHRA and contribute at least $400 per employee during the taxable year. The credit amount equals $400 multiplied by the number of employees covered under the arrangement, and pass-through entity owners may claim their proportionate share of the credit.
The bill also amends the state’s credit-ordering statute to place the new ICHRA credit in the sequence of credits applied against a taxpayer’s Ohio income tax liability. It applies to taxable years ending on or after the effective date, and the tax commissioner may require documentation to verify eligibility. Although the introduced text shown here focuses on the tax credit, the bill caption indicates it also includes insurance-related provisions aimed at prohibiting certain acts or practices intended to steer individuals away from employer-provided insurance.
Impact
HB133 would add a new section to the Revised Code authorizing a state income tax incentive for qualifying small employers that fund ICHRAs, thereby reducing Ohio tax liability for eligible businesses and certain pass-through owners. It would also revise the state’s credit-priority rules in section 5747.98 to incorporate the new credit into the existing ordering framework. The bill affects employers with 2 to 50 employees, pass-through entity owners, and the Ohio tax commissioner, who would administer and verify claims for the credit.
Sentiment
The available voting history suggests strong bipartisan support and little opposition. The bill received favorable passage in House committee by a 10-0 vote and then passed the House unanimously, 93-0. No committee transcript is available here, but the unanimous votes indicate the proposal was broadly viewed as acceptable, at least in its House form.
Contention
Based on the materials provided, there is no recorded substantive controversy over the tax credit itself. The main policy issue implied by the bill is whether Ohio should subsidize small employers that use ICHRAs as a way to provide health coverage. The bill caption also references restrictions on steering individuals away from employer-provided insurance, suggesting possible concern about insurance marketing or enrollment practices, but no specific objections or competing viewpoints appear in the available record.