110 STAT. 2040 PUBLIC LAW 104-191—AUG. 21, 1996 " (ii) SAFE HARBOR FOR ABSENCE OF PREVENTIVE CARE DEDUCTIBLE.— ^A plan shall not fail to be treated as a high deductible health plan by reason of failing to have a deductible for preventive care if the absence of a deductible for such care is required by State law. "(3) PERMITTED INSURANCE. —The term 'permitted insurance' means— "(A) Medicare supplemental insurance, "(B) insurance if substantially all of the coverage provided under such insurance relates to— "(i) liabilities incurred under workers' compensation laws, " (ii) tort Kabilities, "(iii) Uabilities relating to ownership or use of property, or "(iv) such other similar liabilities as the Secretary may specify by regulations, "(C) insurance for a specified disease or illness, and "(D) insurance paying a fixed £unount per day (or other period) of hospitalization. " (4) SMALL EMPLOYER.— "(A) IN GENERAL.— The term 'small employer' means, with respect to any calendar year, any employer if such employer employed an average of 50 or fewer employees on business days during either of the 2 preceding calendar years. For purposes of the preceding sentence, a preceding calendar year may be taken into accomit only if the employer was in existence throughout such year. "(B) EMPLOYERS NOT IN EXISTENCE IN PRECEDING YEAR.— In the case of an employer which was not in existence throughout the 1st preceding calendar year, the determination under subparagraph (A) shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year. " (C) CERTAIN GROWING EMPLOYERS RETAIN TREATMENT AS SMALL EMPLOYER.—The term 'small employer' includes, with respect to any calendar year, smy employer if— "(i) such employer met the requirement of subparagraph (A) (determined without regard to subparagraph (B)) for any preceding calendar year after 1996, "(ii) any amount was contributed to the medical savings account of any employee of such employer with respect to coverage of such employee under a high deductible heedth plan of such employer during such preceding calendar year and such amount was excludable from gross income under section 106(b) or allowable as a deduction under this section, and "(iii) such employer employed an average of 200 or fewer employees on business days during each preceding calendar year after 1996. " (D) SPECIAL RULES.— "(i) CONTROLLED GROUPS. —For purposes of this paragraph, all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as 1 employer.
�
