Update: On November 7, 2019, the IRS announced the QSEHRA 2020 reimbursement rates. We've updated this article and table below.
QSEHRA contribution limits for 2020
The 2020 QSEHRA rates were announced on November 7,2019. The contribution limits for 2020 will go up $100 a year for single employees and $150 a year for employees with dependents.
The below table summarizes the annual QSEHRA contributions limits:
Here are how the QSEHRA rates look to employees on a monthly basis:
Key dates to know
PCORI Fee: PCORI fee is due July 31st for the fee incurred in the previous year. So on 7/31/19, anyone who has a QSEHRA in 2018 will owe a fee based on their 2018 QSEHRA.
Open enrollment: Individuals will be able to renew or select new plans during open enrollment, between November 1st and December 15th. Although there's no deadline to start a QSEHRA, we recommend getting setup before or during the Open Enrollment season so employees can shop with their reimbursement amounts.
Need help setting up a QSEHRA?
Our QSEHRA software make it easy and automatic. We'll automatically create your legal plan documents and IRS notices. Employees just snap photos of receipts on their phones and get reimbursed on payroll. Setup just takes 2-3 minutes. Learn more or get started.
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Strong outlook for QSEHRA 2019 and Beyond
Although the Trump administration has gone to great lengths to disassemble many of former President Obama's healthcare policies like the ACA, QSEHRA remains a bipartisan example of what politicians on both sides can agree upon. Further rules to expand HRAs even further have been announced. That gives us great confidence that QSEHRA and "defined contribution" will continue to be supported amidst policy changes in the coming years.
It's not surprising that QSEHRA has continued to gain momentum with small businesses and startups. But it seems to fly under the radar since it's still relatively new. As we see firsthand at Take Command Health, more and more savvy small business owners are catching on to offer affordable, flexible, and efficient benefit packages for their teams.
What we expect to see for QSEHRA 2019
A big change we expect to see for 2019 is increased awareness for this great tax advantage for small businesses. That's exactly why we are trying to spread the word about QSEHRA.
Since QSEHRA is a relatively new practice, there's lots of gray space when it comes to legal and tax questions. While we recently did a Q&A blog with a lawyer to really dig in to some of these complicated questions, we hope to see more clarity surrounding QSEHRA and how it interacts with tax law and healthcare policy.
Another shift we would like to see is states getting on board with QSEHRA, just like Texas did last week and Minnesota did earlier this year with its special enrollment period. State law varies from state to state and the layers of policy get a little confusing, as does the hierarchy surrounding small business health insurance and the rules and regulations that come with it.
For the growing number of small businesses and startups continuing to opt for QSEHRA to offer staff benefits, it's important to keep an eye on the policy changes in Washington. While nothing seems to happen fast on the Hill, it's certainly confusing to keep track of everything. Our team at Take Command Health is paying close attention to how policy changes will affect QSEHRA and small business health insurance. We will keep you up to date!
If you're eager for more QSEHRA info, please check out our brand new QSEHRA Guide! It's chock full with information on the history of QSHERA, QSEHRA administration, rules, regulation, and more!
About Take Command Health
Take Command Health launched three years ago with the goal of bringing awareness, advocacy, and transparency to the confusing world of health insurance for small businesses and individuals. Take Command Health is at the forefront of this issue, a recognized leader in QSEHRA administration and small business HRA tax strategy, with customers in every state. It operates in Arizona, California, Florida, Georgia, Indiana, Michigan, North Carolina, Pennsylvania, Texas, Tennessee, and Wisconsin for individual insurance and offers small business HRA administration nationwide.