Qualified Small Employer HRA (QSEHRA)
An HRA for small businesses that reimburses employees for individual health insurance and medical expenses.
What is Qualified Small Employer HRA (QSEHRA)?
A Qualified Small Employer HRA (QSEHRA) is a type of Health Reimbursement Arrangement designed for small businesses with fewer than 50 full-time employees that don't offer group health coverage. It allows employers to reimburse employees tax-free for individual health insurance premiums and medical expenses.
QSEHRAs have annual reimbursement limits set by the IRS ($6,150 for individual coverage and $12,450 for family coverage in 2024). Employers can offer any amount up to these limits but must offer the same terms to all eligible employees.
Unlike ICHRAs, you cannot have both a QSEHRA and an HSA if the QSEHRA can pay for more than just insurance premiums. However, if the QSEHRA is limited to premium reimbursement only, HSA compatibility may be possible.
Frequently Asked Questions
Who can offer a QSEHRA?
Small businesses with fewer than 50 full-time employees that don't offer group health coverage.
Can I have an HSA with a QSEHRA?
It depends. If the QSEHRA covers only premiums, you may be able to have an HSA. If it covers all medical expenses, it disqualifies you from HSA contributions.
What are the QSEHRA limits?
For 2024, maximum reimbursement is $6,150 (individual) or $12,450 (family). Employers can offer less but must treat all employees equally.
Related Terms
Health Reimbursement Arrangement (HRA)
An employer-funded account that reimburses employees for qualified medical expenses and sometimes health insurance premiums.
Individual Coverage HRA (ICHRA)
An employer-funded account that reimburses employees for individual health insurance premiums and medical expenses.
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