Tip #383: What’s A QSEHRA?

Just what the insurance industry needs; i.e., another acronym!

We’ve received a number of inquiries from small businesses – those that can’t afford to offer a traditional group health plan – about QSEHRAs, or “Qualified Small Employer Health Reimbursement Arrangements.”

For 2019, a business with no more than 50 employees can contribute tax free dollars for medical expenses – including individual health insurance premiums – up to $5,150 for self-only coverage and $10,450 for families.

Of further note:

• there are no contribution or participation minimums. (Yes, you can have just one employee.)
• amounts contributed are usually fixed and thus budgeted more easily than ever rising premiums

• individual ‘Obamacare’ tax credits are off-set dollar for dollar for dollar by employer QSEHRA contributions

Small businesses can formulate their own plan documents; review, approve, and store employee reimbursement requests; and keep up with regulatory changes on their own. This is quite complex and can result in error, subjecting the business to fines.

A better choice would be to hire a third party QSEHRA administrator.