MISSISSIPPI LEGISLATURE
2025 Regular Session
To: Finance
By: Senator(s) Boyd
AN ACT TO PROVIDE AN INCOME TAX CREDIT FOR CERTAIN SMALL EMPLOYERS OFFERING THEIR EMPLOYEES AN INDIVIDUAL COVERAGE HEALTH REIMBURSEMENT ARRANGEMENT (ICHRA) IN LIEU OF A TRADITIONAL EMPLOYER-PROVIDED HEALTH INSURANCE PLAN; TO PROVIDE THE AMOUNT OF THE CREDIT; TO PROVIDE A REPORTING REQUIREMENT TO THE DEPARTMENT OF REVENUE; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. As used in this section:
(a) "Covered employee" means an employee for whom a qualified employer provides a contribution to an ICHRA.
(b) "ICHRA" means an individual coverage health reimbursement arrangement (ICHRA), as described in Section 9831(d) of the Internal Revenue Code.
(c) "Qualified employer" means an employer that:
(i) Has fewer than fifty (50) employees;
(ii) Is subject to tax liability under this chapter; and
(iii) Offers an ICHRA in lieu of a traditional employer-provided health insurance plan.
(2) (a) For the first taxable year in which a qualified employer provides an ICHRA, the employer may claim a credit of up to Four Hundred Dollars ($400.00) per covered employee, if the employer's contribution to the ICHRA equals or exceeds either:
(i) The level of benefits provided in the prior benefit year; or
(ii) The amount contributed per covered individual to the employer's previous health insurance plan during the prior benefit year.
(b) For the second taxable year in which a qualified employer provides an ICHRA, the employer may claim a credit of up to Two Hundred Dollars ($200.00) per covered employee.
(3) An employer that claims a credit under this section must report to the department every three (3) years after claiming the credit. The report must include:
(a) Whether the employer continued to offer the ICHRA or reverted to a traditional employer-sponsored plan; and
(b) Details regarding the level of benefits provided under the ICHRA.
(4) (a) The total aggregate amount of credits claimed under this section shall not exceed Ten Million Dollars ($10,000,000.00) in any calendar year. The department shall approve claims in the chronological order of filing until the cap is reached.
(b) A credit under this section may not exceed the employer's tax liability under this chapter for the tax year. Excess credits may be carried forward up to ten (10) years but may not be carried back or refunded.
(5) A qualified employer must claim the credit on its annual state tax return in the manner prescribed by the department. The employer shall provide all necessary documentation to verify eligibility for the credit.
(6) The department shall adopt rules necessary to implement and administer this section.
SECTION 2. Section 1 of this act shall be codified in Chapter 7, Title 27, Mississippi Code of 1972.
SECTION 3. This act shall take effect and be in force from and after January 1, 2025.