Are you in the process of setting up a QSEHRA (small business HRA) at your small business or startup? Or maybe you are still mulling things over. Either way, once you decide to make the jump, it's important to communicate the details to your employees and help them make the most out of the new arrangement. Since QSEHRAs have just recently become available since a new bipartisan law was passed last December, chances are that your employees aren't going to know the ins and outs on their own.
Communication doesn't end once you send a staff email stating that they are eligible to participate in the small business HRA. Here are a few tips to share with your employees so they get the most out of their small business HRA.
Sign up ASAP
Don’t let that email get buried in your inbox. Your plan starts the day you enroll, so if you wait a month to get started you will lose out on a whole month’s worth of reimbursements! All you need to sign up is a few minutes to fill out the enrollment application and include proof of insurance (either a monthly bill or copy of ID card will do).
If you currently don’t have health insurance or your employer is cancelling your group plan and replacing it with the HRA, Take Command can help you find your new plan. Our database will help you shop and compare plans in your area that include your doctors and prescriptions. Our tool is free and easy to use! The nice thing about the HRA is it allows you greater flexibility in choosing a health plan that fits your needs versus an employer sponsored group plan that might not.
Once you are enrolled you can begin submitting expenses. Your plan agreement will include a list of items that can be reimbursed such as: monthly premiums, medical expenses (including LASIK), and over-the-counter medications. You should also pay close attention to the list of items that are not approved for reimbursement. If you cannot tell an item is eligible for reimbursement, submit it and see what your plan administrator says. You don’t want to leave money on the table!
Make sure you keep receipts of all your expenses as you will need to submit them each month for reimbursement! You can submit your expenses as often as you like during the course of the month.
Max out reimbursements each year
Remember, your employer is offering you the HRA as your health benefit. You will want to make sure that you max out their contributions for the year to take full advantage. The only way to receive their contributions is to submit your expenses. Don’t worry if you can’t reach your max reimbursement one month. The money will be carried forward to the end of the year.
Here's an example. Let's say your employer contributes $400 a month toward your health expenses. During the course of the month, you submit $350 in expenses. That leaves a balance of $50 which is carried over to the next month, meaning you would have $450 for the next month if you need it.
Just remember, any unused money at the end of the year will not be carried forward into the new year. The plan will start over at the new year.
Receiving your reimbursements
Your reimbursements will be added into your paycheck. You can check your reimbursement amount on your pay stub. Reimbursements are not subject to payroll taxes and you should see the entire amount added to pay.
Once you begin using your HRA you will see how convenient and easy it is to be reimbursed for your medical expenses.
About Take Command
Does all of this sound confusing? Not sure where to start? We offer support for you as a business owner as well as your employees. Our small business experts will take care of the details so you can go back to managing your business.
Here's how we can help.
For your employees:
- We offer a data-driven platform to help them pick the best on- or off-exchange plan based on their preferred doctors, unique needs and prescriptions.
- Our customized portal allows them to enroll in the HRA online, view their HRA documents, submit medical expenses (if allowed), access their membership benefits, and upload their proof of coverage for compliance checks
For you (as a business owner):
- We handle all the legal work and make tax season easy and painless
- Employee onboarding
- An easy and quick online signup process
- A customized admin portal for your business allows you to review and approve HRA documents, view monthly reimbursement reports, add/remove employees, manage subscriptions, update payment information, and see overview information about HRAs.
I wrote this blog because I love helping people decode confusing insurance jargon and understand the fine print. I'm a licensed health insurance professional and specialize in simplifying health insurance for individuals and small businesses. My QSEHRA articles have been featured regularly on Accounting Today, Accounting Web, HRWeb, and other industry publications. I'm also a member of Take Command Health's client success team and a full-time mom. Learn more about me and connect with me on our about us page. Thanks!