QSEHRA

Qualified Small Employer Health Reimbursement Arrangement

For years starting after December 31, 2016, (eligible) employers can set up a plan, or an arrangement, for reimbursement of (eligible) employees’ individual health insurance by following the following regulations for all 2019 plans

 The plan needs to be nondiscriminatory

Your  business needs to be an eligible employer

You must provide notice to all employees no later than 90 days before the first day of the plan year of the QSEHRA

If you’re setting up a QSEHRA for the first time, the notice may be sent at any point prior to, and including, the day your QSEHRA goes into effect

The plan can only reimburse employees for medical expenses as defined under IRC § 213(d)

Employees must have minimum essential coverage in order for reimbursements to be excludable from income

No salary reduction contributions are allowed

No unused QSEHRA benefits can be cashed out by employees

Employers must report the amount of payments and reimbursements that the eligible employee is entitled to receive from the QSEHRA and they must file Form 720 to report the respective PCOR fees

The maximum reimbursement is $5,150 a year per employee

More QSEHRA facts can be found here

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Additional guidance can be found within

Notice 2017-67

Notice 2018-57