As a small employer (fewer than 50 employees), you should consider the Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) as a good way to help your employees with their medical expenses.
One very attractive aspect of the QSEHRA is that it can reimburse individually purchased insurance without your suffering the $100-a-day per-employee penalty that generally applies to the employer that reimburses employees for individually purchased insurance. The second and perhaps most attractive aspect of the QSEHRA is that you know your costs per employee. The costs are fixed—by you.
Eligible Employer
To be an eligible employer, you must have fewer than 50 eligible employees and not offer group health or a flexible spending arrangement to any employee. For the QSEHRA, group health includes accepted benefit plans such as vision and dental, so don’t offer them either.
Eligible Employees
All employees are eligible employees, but the QSEHRA may exclude
employees who have not completed 90 days of service with you,
employees who have not attained age 25 before the beginning of the plan year,
part-time or seasonal employees,
employees covered by a collective bargaining agreement if health benefits were the subject of good-faith bargaining, and
employees who are non-resident aliens with no earned income from sources within the United States.
Dollar Limits
Tax law indexes the dollar limits for inflation. The 2023 limits are $5,850 for self-only coverage and $11,800 for family coverage. For part-year coverage, you prorate the limit to reflect the number of months the QSEHRA covers the individual.
Questions?
If the QSEHRA is a plan of interest for you, please contact TrueBlaze Advisors so we can get your 2024 QSEHRA plan in place on or before October 2, 2023. We have in our arsenal the documents we can use to create both (a) the written plan and (b) the employee request for reimbursement.