Choosing to implement a small business HRA (QSEHRA) is a great decision that will have a positive impact on your bottom line and employee retention. However, HRA mistakes can be costly if you do not remain compliant. If you are scratching your head wondering about managing your small business HRA, we have a few helpful tips to get you started.
Update your plan with staff changes
Your business is constantly evolving and changing. Staffing changes are a certainty as employees retire or move on and new employees are brought on. Make sure you update your HRA with staff changes as they occur to maintain compliance with the parameters set forth in your plan documents.
Reimbursements - Record and Storage management
It is pertinent that you have good record and storage management for your reimbursements and receipts. Businesses are required to show documentation for 7 years relating to HRA expenses. The IRS outlines the details in Publication 583.
Evaluate Allowance Amounts
Businesses are allowed to make changes to the monthly allowance given to employees for the HRA. Make sure you give your employees proper notice of changes as outlined in your plan documents. Most employers prefer to make changes to plan contributions coinciding with open enrollment (Nov 1- Dec 15) when employees are able to adjust their plan choice accordingly.
Know when to ask for help!
There’s no rule that says you can’t administer the HRA yourself. But trying to run a business and ensure that your HRA is compliant with all IRS requirements and compliance issues is stressful and time consuming. Our new small business platform will handle all the accounting and legal legwork for the QSEHRA, take care of onboarding each of your employees, and make tax time easy and painless. You'll never have to hassle with receipts or worry about setting up a health plan again.
Another perk is that you can offer a personalized employee benefits portal and provide "big company" perks like dental, vision, 24/7 doctor help line, medical bill negotiation and pharmacy discounts.
Want to see if an HRA could work for your small business? Learn more about our small business platform or schedule a call with one of our small business HRA experts today.
Another great place to start is the administration chapter of our handy QSEHRA guide!
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!