Now that you have decided to offer your employees a QSEHRA benefit, you may be wondering what documents need to be created before your small business HRA (QSEHRA) begins. There are two main documents that need to be written, one for the employer (Legal Agreement) and one for the employees (Plan Summary).
Here's the QSEHRA plan documents you'll need to get started:
1. Legal Agreement
The legal agreement establishes the small business HRA for the employer. The legal agreement should include:
- Named fiduciaries and plan administrators and their responsibilities
- Eligibility requirements for the small business HRA
- Effective dates of participation
- Description of benefits provided and excluded
- How the small business HRA is funded and how it makes payments
- Claims procedures
- HIPAA privacy officers and rules relating to the use of protected health information (PHI)
- Information on federal mandates
- The procedure for amending the plan
- The procedure for plan termination
Employees must be provided a written notice in the form of a Plan Summary. The Plan Summary is a condensed, user friendly explanation (ie- not heavy on the legal-ease) of the QSEHRA benefit and how it works.
IRS Notice 2017-67 contains guidelines on the small business HRA initial written notice contents and provides an example of written notice. The QSEHRA Employee Notice must contain the following information:
- Permitted benefit amount per employee & small business HRA start date for employee
- A statement that the eligible employee must inform any Marketplace to which the employee applies for advance payment of the premium tax credit (APTC) of the amount of the provided benefit.
- A statement that the amount of the provided benefit may affect the eligibility for and the amount of the premium tax credit and that the employee should retain the written notice because it may be necessary to calculate the premium tax credit on the employee’s individual income tax return.
- A statement that if the eligible employee does not have minimum essential coverage for any month, then the employee may be liable for an individual shared responsibility payment under Section 5000A of the Affordable Care Act for that month and that reimbursements under the small business HRA for expenses incurred in that month will be included in the employee’s gross income.
The Employee Notice can be delivered electronically according to the guidelines the IRS has set forth.
How Can Take Command Health Help?
Does this sound confusing, expensive or both? Don't worry. That's where Take Command Health's new small business platform can help. Set up is a breeze.We'll handle all the accounting and legal legwork, take care of onboarding each of your employees, and make tax time easy and painless. You'll never have to hassle with receipts or worry about setting up a health plan again.
Want to see if an HRA could work for your small business to offer personalized benefits? Learn more about our small business platform or schedule a call with one of our small business HRA experts today.