Does reimbursing employees for health benefits tax-free sound like a good fit for your business? If so, it's best to outsource the administration functions of the HRA. This is not the time to go to DIY route. As your'e evaluating QSEHRA providers, here's what to know about how to choose a QSEHRA administrator.
How to choose a QSEHRA administrator
The last thing a small business employer wants to do is more paperwork. Your employees are valuable to you, and you want to provide them with benefits that matter, like an employee health reimbursement arrangement (HRA), but getting stuck under paperwork can feel like an insurmountable task to overcome.
If you’ve considered offering some kind of HRA as an alternative to traditional group health insurance, but the time and effort to administer it keeps you from moving forward, it’s time to consider a QSEHRA plan administrator for your employee's health care reimbursement arrangement.
What is a QSEHRA plan administrator?
A QSEHRA plan administrator is a helpful software tool that makes offering your employees a health benefit much easier, saving you time, money, and stress. Your QSEHRA administration software allows for tax-free reimbursement of qualified medical expenses and employee insurance premiums.
As a small employer (with 50 full-time employees or less), your qualified small employer HRA allows you to set aside a fixed amount each month that employees can use to purchase individual health insurance or use on medical expenses, tax-free. You get to offer small business health insurance benefits without the hassle of administering a group plan, and your employees will be happy to choose the plan they want rather than squeezing into a one-size-fits-all plan.
Your QSEHRA plan administrator will ensure that employee privacy is protected – a task that can take a lot of time and effort to make sure medical receipts and information is secured if you tried to administer your own QSEHRA plan. In short, your QSEHRA plan administrator takes care of all the paperwork and other tasks associated with your employee health benefit offering and communicates the benefits to your employees.
Finding the best QSEHRA administrator
The benefits of Qualified Small Employer HRAs (QSEHRA) help small businesses afford benefits for their teams.
With tax-free reimbursements, business owners with less than 50 employees save on benefits while employees get to choose the plan that works best for them.
It's a more efficient model of benefits, sometimes referred to as defined contribution or 401(K) style benefits.
To get started, all you have to do as a business owner is decide:
- How much to reimburse
- What to reimburse
- Whether to include part-time employees
- Whether or not to implement waiting periods
- When to start
That's it. Your work is done here!
Helpful resource → How to Set Up a QSEHRA
From there, you outsource certain administrative functions to save you time, energy, and in some cases, legal troubles.
Read more about what our clients have to say about us here.
QSEHRA administrator 101
Remember: not all QSEHRA administrators are created equal. You'll need to do your research to make sure the QSEHRA administrator tool you choose will make your life easier and protect you from costly missteps.
These are typical QSEHRA administrator functions.
1. Handle compliance, notifications, and reporting.
- QSEHRA Legal Plan Documents
- Employee MEC Verification
- IRS Deadlines
- Form 720 (PCORTF)
- Year-end W-2 Reporting
- HIPAA and Privacy Compliance
2. Support your employees
- 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)
3. 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.
→ Learn more about QSEHRA Plan Documents here.
What should QSEHRA plan administrators do?
The obvious big-picture goal is to make your life easier. When you work with a QSEHRA plan administrator like Take Command, that’s exactly what you’ll experience. Less stress, more freedom, happier employees.
With a QSEHRA plan administrator like Take Command, you’ll have a quick and easy online signup process and access to a customized admin portal that lets you:
- Review and approve HRA documents
- View monthly reimbursement reports
- Add or remove employees
- Manage subscriptions
- Update payment information
- See overview information about HRAs
- Access onboarding and orientation videos (for employers and employees)
- Access tax forms and documents
- Access sample employee communications (like letters and flyers to promote your new health benefit)
The platform makes it easy for you to maintain an employee roster, access statements and reports, and process reimbursements.
84% of our clients surveyed said they spend less than an hour each month administering their HRA.
Sounds great, right?
There are also more specific things you want to ensure your QSEHRA plan administrator does for you. Here’s what you should expect:
Keep you in compliance.
Your QSEHRA plan administrator role is to take compliance, notifications, and reporting off your plate. What does that actually mean? These are some of the specific forms, rules, and regulations that a QSEHRA administrator.
- QSEHRA Legal Plan Documents
- Employee MEC Verification
- IRS Deadlines
- Form 720 (PCORTF)
- Year-end W-2 Reporting
- HIPAA and Privacy Compliance
Take care of employee onboarding and support.
Your QSEHRA administrator should communicate with your employees about their HRA benefits, how to use the HRA, and provide helpful educational materials and support. They’ll also help employees shop for individual health insurance plans to use with their QSEHRA or set up their existing health plan for reimbursement. Our licensed health professionals are ready to help your team optimize their QSEHRA reimbursements.
Why you can't administer a QSEHRA yourself
We get asked this question a lot: Can I administer a QSEHRA myself? The answer is not really. There are a few very valid reasons why that isn't a great idea.
- PRIVACY: Given the nature of a QSEHRA and the private health information involved filing reimbursements for qualified medical expenses, privacy is a big issue, even before we get into the whole HIPAA aspect of it (more on that below). As an employer, you would have access to personal information about your employees' health. This could be potentially uncomfortable for everyone involved.
- PAPERWORK: It's a hassle for employers to keep up with medical receipts and time-consuming to maintain them in a secure way.
- HIPAA COMPLIANCE: Because small business HRAs are designed for companies with less than 50 employees, it doesn’t technically fall within many of the federal laws that affect health plans built for larger corporations. But that doesn't mean you are off the hook when it comes to HIPAA (the Health Insurance Portability and Accountability Act of 1996). Some parts of HIPAA still apply to small business HRAs. Why? Because all health plans, including those reimbursed through a QSEHRA, must observe the HIPAA Privacy Rule, regardless of the company's size. This rule protects patients' personal health information (PHI), meaning the hard documentation, emails, and telephone calls regarding an individual's health information. Examples include things like a bill from a doctor's visit, an MRA scan, lab work results, etc. More on HIPAA and QSEHRA here.
→ Read this QSEHRA review of Take Command from an IT consultant!
Why compliance is no joke
Penalties for HIPAA noncompliance are serious business. Fom the relatively less-serious "Reasonable Cause" to the more-serious "Willful Neglect," 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.
If that wasn't enough of a deterrent, state laws could impose additional penalties for the same offenses. Also, even if you didn't intend for noncompliance to occur or it was an accident, you are still liable.
Helpful resource → QSEHRA Compliance Guide
The bottom line?
Avoid this altogether and opt for a QSEHRA administration tool that will keep you out of trouble.
Setting it up is easier than you think.
Pro-tip: Take Command's platform drafts plan documents with HIPAA compliant language and instant updates, and takes care of QSEHRA administration requirements like reviewing documents that contain protected health information.
How do I get started with a QSEHRA administrator?
It can be stressful for any business owner trying to set up a QSEHRA on their own. You can simplify and streamline the process and access more QSEHRA resources when you work with an administrator to help you set up a QSEHRA for your small business.
Your QSEHRA administration software should include some key features to make it easy to start. Some of these include automated plan document creation, plan amendments, online benefits administration, document review, reimbursement documentation, online support, and federal and state compliance tools.
The tools and resources available to you through your QSEHRA administration plan will provide you with information and support for every aspect of your employee health benefit offering. From sample employee announcement letters and flyers, tax forms, onboarding videos, and so much more, you’ll have everything you need to get started with a QSEHRA plan.
On average, our clients spend less than an hour every month performing three basic tasks while administering their HRA.
Need help with QSEHRA administration and compliance?
Join forces with Take Command, a leader in QSEHRA administration and small business HRA tax strategy. When you choose a third-party HRA administrator to manage your QSEHRA (like Take Command!), we take care of all the confusing stuff for you, ensure that you remain compliant, and provide the best information and resources for your employees. Give your employees the health care benefits you want to, without the added stress.
Other helpful resources:
- QSEHRA FAQs
- QSEHRA Rules
- QSEHRA Requirements
- How to set up a QSEHRA
- Our QSEHRA Administration platform
Our small business experts will take care of the details so you can go back to managing your business. Here's how.
To help your employees, we offer a data-driven platform to help them pick the best on- or off-exchange plan based on their preferred doctors, unique needs and prescriptions.
Pro-tip: we are the only QSEHRA administrator that also offers individual health plans.
Our customized portal allows your employees to enroll in the HRA online, access their HRA documents, submit medical expenses, look up their membership benefits, and upload proof of coverage for compliance checks.
For your business, we do all the heavy lifting:
- We handle all the legal work and make tax season easy and painless
- Employee onboarding
- An easy and quick online signup process
- A customized admin portal for your business allows you to review and approve HRA documents, view monthly reimbursement reports, add/remove employees, manage subscriptions, update payment information, and see overview information about HRAs.
If you want to explore what types of small business HRAs are right for your company, our Small Business HRA Strategy Guide is another great place to start for optimizing your tax savings.
