The IRS just announced the 2023 QSEHRA limits! As you know, the Qualified Small Employer HRA allows small business owners to reimburse their employees for health premiums and qualified medical expenses. QSEHRA is available to companies with less than 50 full time equivalent employees and it has its limits in terms of monthly reimbursement rates. This post jumps into the 2023 QSEHRA reimbursement maximum for small businesses.
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 was the 2022 QSEHRA reimbursement maximum?
Last year, employers reimbursing employees for health insurance had a slightly lower threshold.
- Individual $5,450 or ($454.16/month)
- Family $11,050 or ($920.83/month)
In the law, these amounts are tied to inflation, and we’ve seen them go up a little bit every year.
- Individual $5,300 or ($441.67/month)
- Family $10,700 or ($891.67/month)
- Individual $5250 or ($437.50/month)
- Family $10,600 or ($883.33/month)
All QSEHRA 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.
Another HRA option
For some businesses, depending on local market factors and their company makeup, monthly QSEHRA limits work great for their employees to be able to choose a quality MEC plan. For some employers, however, they want to offer more than the QSEHRA contribution limit.
There is an alternative HRA option which doesn’t have a contribution limit. The individual coverage HRA, or ICHRA, can be thought of as a “super charged” version of the QSEHRA.
It's worth checking out if the limits are a concern. Again, what's best for one business isn't necessarily the best for another. Our team is on hand to help guide you through this decision!
Take Command can help answer your HRA questions!
While there are numerous differences, the primary contrast when you compare QSEHRA vs. ICHRA is eligibility based on company size and design flexibility. If ICHRA is piquing your interest, peruse through our complete list of ICHRA pros and cons. Our team of QSEHRA administration experts are standing by to answer your questions about these HRAs. In the meantime, you can check out our comprehensive QSEHRA and ICHRA guides.
This post was originally published in 2020 and has been updated with new information and insights for 2023.
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.