The QSEHRA has been gaining momentum amongst small employers since its inception in 2017. Now at the cusp of its 4th year, the Qualified Small Employer HRA (QSEHRA) has some exciting new updates for 2020.
QSEHRA and Special Enrollment Periods!
Employees who become eligible to participate in QSEHRA for the first time on or after January 1, 2020 will qualify for a special enrollment period to purchase individual health insurance for themselves and family members.
This is a big change that we are particularly excited about. In order for employees to be eligible to participate in QSEHRA, they need to have health insurance that qualifies as Minimum Essential Coverage (MEC). Individual health insurance (ie. bronze, silver, gold) plans qualify as MEC, however, there is a limited time when these plans are available to purchase each year. This time period is called open enrollment and runs from Nov 1- Dec 15 in most states. If an individual needs to purchase a plan outside of open enrollment, they would need to have a qualifying event to trigger a special enrollment period (SEP). Prior to this update qualifying events have been limited to: marriage, divorce, having a baby, moving, or loss of coverage.
Why is this important?
QSEHRA offers flexibility to small employers, one being that they can adopt a new QSEHRA plan at any point in the year. The problem we have seen firsthand, is that when employers adopt a plan mid-year, employees often struggle to purchase a qualifying plan to participate if they don’t qualify for special enrollment period. This meant employees were frustrated because they couldn’t receive the tax-free benefit, and employers were equally frustrated because employees were not participating in the new benefit they spent time and money on.
The special enrollment period trigger will increase the adoption of the QSEHRA benefit as employees have 60 days from the initial offering to purchase a qualifying plan.
2020 QSEHRA Reimbursement Rates
Since QSEHRA's inception, we have seen the maximum contribution limits increase year over year. The IRS has announced the 2020 annual maximum contribution rates for QSEHRA.
About Take Command Health
Take Command Health makes setting up an HRA for your business easy. Our team will help you set your budget, take care of the admin paperwork, and help your employees pick a plan that suits their needs. No need to worry about finding the perfect plan that has the right doctor network or prescription coverage, ultimately leaving someone left out and disgruntled. With the HRA, each employee picks the perfect plan for them that fits within your budget. Sounds like a win-win to us!