The Qualified Small Employer HRA allows small business owners to reimburse their employees for health premiums and qualified medical expenses. QSEHRA is available to companies with less than 50 full time equivalent employees and it has its limits in terms of monthly reimbursement rates. If you’re wondering “What is the 2022 QSEHRA reimbursement maximum”, you’re in luck! The IRS just released those numbers, so let’s get right to it!
A quick QSEHRA recap:
With the QSEHRA, the general idea is this: employers simply reimburse employees when a health expense occurs. There is no pre-funding of accounts. If employees don't submit receipts for reimbursement or do not need medical care, the leftover funds stay in the employer's pocket.
Here’s how it works:
- Employers design their plan and set reimbursement allowances
- Employees pay for their own health insurance and medical bills
- Employees provide proof of their expenses
- Employers reimburse the employee up to the set limit
What is the 2022 QSEHRA reimbursement maximum?
- Individual $5,450 or ($454.16/month)
- Family $11,050 or ($920.83/month)
In the law, these amounts are tied to inflation, and we’ve seen them go up a little bit every year.
- Individual $5,300 or ($441.67/month)
- Family $10,700 or ($891.67/month)
- Individual $5250 or ($437.50/month)
- Family $10,600 or ($883.33/month)
All QSEHRA reimbursements are subject to annual maximums and become available to employees on a monthly basis. This means employees can’t take the full annual amount in January—instead, the funds become available to employees each month.
Another HRA option
For some businesses, depending on local market factors and their company makeup, monthly QSEHRA limits work great for their employees to be able to choose a quality MEC plan. For some employers, however, they want to offer more than the QSEHRA contribution limit.
There is an alternative HRA option which doesn’t have a contribution limit. The individual coverage HRA, or ICHRA, can be thought of as a “super charged” version of the QSEHRA.
It's worth checking out if the limits are a concern. Again, what's best for one business isn't necessarily the best for another. Our team is on hand to help guide you through this decision!
Take Command can help answer your HRA questions!
While there are numerous differences, the primary contrast when you compare QSEHRA vs. ICHRA is eligibility based on company size and design flexibility. Our team of experts are standing by to answer your questions about these HRAs. In the meantime, you can check out our comprehensive QSEHRA and ICHRA guides.
A wife to one and mother to four, Keely does all of the things. She’s also dabbled in personal finance blogging and social media management, contributed to MetroFamily magazine, and is passionate about good food, treasure hunting and upcycling. With a B.S. in Psychology from the University of Oklahoma and a knack for a witty punchline, it’s no surprise that Keely’s social posts are as clever as they get. In her (very little) free time, you’ll find Keely with her nose in a book or trying out a local restaurant with her family.