We field many questions from Medicare participants wondering if they are eligible to receive the tax-free benefits of QSEHRA that their employers have set up for them. The answer is Yes! Medicare participants can benefit from the small business HRA and they should participate in their employer’s plan!
Which Medicare Insurance qualifies for QSEHRA participation?
In order to participate, employees need to have health coverage that meets Minimum Essential Coverage (MEC). Either Medicare part A (Hospital Insurance) or part C (Medicare Advantage) qualify as MEC.
What expenses are eligible for QSEHRA reimbursement with Medicare?
Employers have the option to set up the HRA to reimburse premiums only or premiums + expenses. We recommend the option to include eligible medical expenses to most of our clients so that all employees have a chance to maximize their benefit.
Medicare part A (Hospital Insurance) Most people do not pay a premium for Part A as it is a benefit from paying Medicare taxes for a certain period of time. This is known as “premium free Part A.” If for some reason you are not covered under social security (or weren't a government employee who paid Medicare tax), you can voluntarily enroll in Medicare A. In this situation you can include the premium for reimbursement through a small business HRA.
Medicare B (Medical Insurance) is a supplemental medical insurance. Premiums you pay for Medicare B are an eligible medical expense as long as you have either Medicare A or C as well. Check the information you received from the Social Security Administration to find out your premium. Please note: if your premium is deducted directly from your Social Security, Railroad Retirement Board, or Office of Personnel Management Benefits the premium is not eligible for reimbursement through a small business HRA.
Medicare C (Medicare Advantage) is offered by a private company that contracts with Medicare. Any premiums paid directly out of pocket to the insurance company are eligible for reimbursement through a small business HRA.
Part D (Medicare Prescription Drug Coverage) is a supplemental insurance and premiums paid directly out of pocket are eligible for reimbursement through a small business HRA.
In terms of eligible medical expenses for QSEHRA reimbursement: any copays, deductibles, coinsurance, prescriptions, dental, vision, and more are eligible for reimbursement. Employees just need to submit a copy of their medical expense for review through their employee portal.
Take Command Health is here to help!
Are you still wondering if a small business HRA is right for your business and employees? Hop on a chat with one of our expert agents. We enjoy helping customers take the guesswork out of benefits.