QSEHRA 2023 contribution limits have been announced! Let's look at the maximum amount you can reimburse your employees for health insurance tax-free. The good news is that it's going up each year!
QSHERA 2023 Limits
For 2023, businesses with less than 50 employees can contribute a maximum of $5,850 for individual employees (this adds up to $487.50 per month) and a contribution of $11,800 for employees with a family (this adds up to $983.33 per month).
These QSEHRA contribution limits have gone up since last year! Compared to 2022, 2023 QSEHRA limits have increased by $400 for individual employees and $750 for employees with a family annually.
On a monthly basis, that means $33.33 more each month for individuals to pay toward their healthcare costs and $62.50 for families to use toward healthcare costs. Not bad!
What is a QSEHRA Contribution Limit?
There are regulations that cap the amount that employers can reimburse their employees for health insurance.
All reimbursements are subject to annual maximums and become available to employees on a monthly basis. This means employees can’t take the full annual amount in January—instead, the funds become available to employees each month. Although if they do submit a medical expense that exceeds their reimbursement limits, they can be paid out on a monthly basis.
QSEHRA reimbursement maximums are tied to inflation, so we expect them to go up a little bit every year.
Looking back: Year over Year QSEHRA Contribution Limits
2020 QSEHRA Contribution Limits
2020 QSEHRA contribution limits are:
- Individual $5,250 ($437.50/month)
- Family $10,600 ($883.33/month)
2021 QSEHRA Contribution Limits
2021 QSEHRA contribution limits are:
- Individual $5,300 ($441.67/month)
- Family $10,700 or ($891.67/month)
2022 QSEHRA Contribution Limits
2022 QSEHRA contribution limits are:
- Individual: $5,450 ($454.16/month)
- Family: $11,050 ($920.83/month)
How much do I reimburse for QSEHRA?
Employers have a few options on setting reimbursement rates. The key is rates have to be offered fairly to all eligible employees. Here are the most common tried and true methods we see:
- Reimburse all the same amount. This is pretty simple. Just pick a rate up to the individual maximum to give all employees.
- Reimburse all the maximum amount. Give all employees the maximum amount they are eligible for under the “single” or “family” categories.
- Reimburse different amounts based on family size. Employers can set different rates based on an employee’s dependents. The IRS requires that employers choose a reference plan or offer a fair percentage of the maximum.
- Reimburse different amounts based on employee age. Employers can vary rates by age but they must be tied to a reference plan on the individual market. To save you significant hassle though, most marketplace plans offer premiums in a 1:3 ratio for individuals ages 26 to 64.
What if I want to contribute more than the QSEHRA limit?
There's another type of HRA that small businesses are eligible for called an Individual Coverage HRA that has no contribution limits! It also has another feature for those who want to offer different types of employees different amounts.
While QSEHRA requires that all employees are reimbursed equally and that amount is only allowed to be scaled based on age or family size, ICHRA offers 11 different employee classes that represent different buckets for an employer to offer different amounts to. Again, it's a great option for some businesses and we are here to help you make the right decision for your company.
Still have questions about QSEHRA contribution limits?
Take Command 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. For an in-depth look at the QSEHRA, check out our guide. Or visit our QSEHRA FAQ page!
A wife to one and mother to four, Keely does all of the things. She’s also dabbled in personal finance blogging and social media management, contributed to MetroFamily magazine, and is passionate about good food, treasure hunting and upcycling. With a B.S. in Psychology from the University of Oklahoma and a knack for a witty punchline, it’s no surprise that Keely’s social posts are as clever as they get. In her (very little) free time, you’ll find Keely with her nose in a book or trying out a local restaurant with her family.