Wondering about QSEHRA and Medicare? We field many questions from Medicare participants wondering if they are eligible to receive the tax-free benefits of QSEHRA that their employers have set up for them. The answer is Yes! Medicare participants can benefit from the small business HRA and they should participate in their employer’s plan!
Can I participate in QSEHRA if I am on Medicare?
The answer is yes! But there are a few details to get settled before you sign up.
Which Medicare Insurance qualifies for QSEHRA participation?
In order to participate, employees need to have health coverage that meets Minimum Essential Coverage (MEC). Either Medicare part A (Hospital Insurance) or part C (Medicare Advantage) qualify as MEC.
What expenses are eligible for QSEHRA reimbursement with Medicare?
Employers have the option to set up the HRA to reimburse premiums only or premiums + expenses. We recommend the option to include eligible medical expenses to most of our clients so that all employees have a chance to maximize their benefit.
Medicare part A (Hospital Insurance) Most people do not pay a premium for Part A as it is a benefit from paying Medicare taxes for a certain period of time. This is known as “premium free Part A.” If for some reason you are not covered under social security (or weren't a government employee who paid Medicare tax), you can voluntarily enroll in Medicare A. In this situation you can include the premium for reimbursement through a small business HRA.
Medicare B (Medical Insurance) Part B covers certain doctor's services, outpatient care, medical supplies, and preventative services. Premiums you pay for Medicare B are an eligible medical expense as long as you have either Medicare A or C as well. Check the information you received from the Social Security Administration to find out your premium.
Medicare C (Medicare Advantage). Medicare Advantage is an “all in one” alternative to Original Medicare. These “bundled” plans include Part A, Part B, and usually Part D. Plans may have lower out-of- pocket costs than Original Medicare. Most plans offer extra benefits like vision, hearing, dental, and more.
Part D (Medicare Prescription Drug Coverage)is a supplemental insurance and premiums paid directly out of pocket are eligible for reimbursement through a small business HRA.
In terms of eligible medical expenses for QSEHRA reimbursement: any copays, deductibles, coinsurance, prescriptions, dental, vision, and more are eligible for reimbursement. Employees just need to submit a copy of their medical expense for review through their employee portal.
Need help with QSEHRA and Medicare?
Are you still wondering if a small business HRA is right for your business and employees? Hop on a chat with one of our expert agents. We enjoy helping customers take the guesswork out of benefits.
Another great place to dive in is the overview chapter in our handy new QSEHRA Guide!
I wrote this blog because I love helping people decode confusing insurance jargon and understand the fine print. I'm a licensed health insurance professional and specialize in simplifying health insurance for individuals and small businesses. My QSEHRA articles have been featured regularly on Accounting Today, Accounting Web, HRWeb, and other industry publications. I'm also a member of Take Command Health's client success team and a full-time mom. Learn more about me and connect with me on our about us page. Thanks!