If you are considering reimbursing your employees tax-free for health insurance through a Qualified Small Employer HRA (QSEHRA), you're probably wondering what to do about compliance, tax-time paperwork, onboarding, and other things you don't have time for. Here's how QSEHRA administration can take those things off your plate.
There's a growing trend among small business owners to forego the traditional, one-size-fits-all employer-sponsored group plans and opt for a reimbursement model, sometimes called a defined contribution model or 401(K) style benefits. Employees purchase an insurance plan that works best for them, employers reimburse them for the cost through a health reimbursement arrangement designed especially for small businesses with less than 50 employees.
It's easy to see why a QSEHRA is appealing. It's budget friendly. It's efficient. It's flexible. It's predictable.
But many considering this option start to wonder how easy it is to set up a QSEHRA and what the upkeep looks like in an already crammed schedule. We're here to tell you that using a third-party HRA administrator (like Take Command Health) will save you time, headaches, and even penalties if you have trouble correctly navigating the compliance requirements and complex rules. A QSEHRA administration tool will do the heavy lifting for you.
To get set up a small business HRA, all you have to do is decide:
- How much to reimburse each month
- What to reimburse (premiums, qualified medical expenses, spouse plan premiums)
- Whether to include part-time employees
- Whether or not to implement waiting periods
- When to start offering your QSEHRA
That's it. Check it off your list. You're done.
Do I need a QSEHRA administration tool?
We get a lot of folks asking whether or not they can administer their own QSEHRA. Our best advice? Don't even think about it. For one, since we are dealing with health insurance and employees' health, privacy is a big deal. Things could get pretty uncomfortable for everyone involved. Then there's the whole issue with the HIPAA Privacy Rule, which is another layer of protection for employees' private health information. It's also time consuming for business owners to keep up with the medical receipts, maintain all the health information in a secure way, and handle the paperwork that comes with it.
If you have a misstep, civil penalties can range from $100 to $50,000 per incident with no jail time to more serious offenses resulting in up to $250,000 in fines and 10 years in prison, especially if information was taken under false pretenses or disclosed on purpose. No thank you.
Have we convinced you? We thought so. Save yourself the energy and potential violation penalties and use a third-party administrator.
What should a QSEHRA administration tool do?
While not all administration tools are the same, there are certain things that every HRA administer should do.
Help business owners navigate the process from start to finish
- QSEHRA Legal Plan Documents
- Employee MEC Verification
- IRS Deadlines
- Form 720(PCORTF)
- Year-end W-2 Reporting
- HIPAA and Privacy Compliance
- Support business owners
- Easy and quick online signup process
- A customized admin portal to review and approve HRA documents, view monthly reimbursement reports, add/remove employees, manage subscriptions, update payment information, and see overview information about HRAs.
Help employees get the most out of their QSEHRA
- Provide helpful educational material to communicate to your employees the benefits of their new HRA and how to get the most out of it
- Support employees while they shop for an individual health insurance plan to use with their QSEHRA
- Robust onboarding process
- Answer questions along the way
- Easy platform to request reimbursements (like simply snapping a picture and uploading on phone)
Want to learn more about our QSEHRA administration platform?
We are the only HRA administrator that also provides support for individuals shopping for health insurance. We can help your employees shop for off- and on-market plans, compare plans side by side, and see what works best for them, their preferred doctors, and their prescriptions.
We make it easy for you, and we will take care of onboarding your employees so they can get the most out of their QSEHRA.
Have questions? Chat with our team online or check out these helpful resources!
- QSEHRA Guide
- QSEHRA Reimbursement Guide
- QSEHRA FAQs
- QSEHRA Plan Designer Tool
- QSEHRA Tax Savings Calculator