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Qualified Small Employer Health Reimbursement Arrangement

We'll focus on your benefits, you focus on your small business

Reimburse employees tax-free with the industry’s only Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) platform with hands-on enrollment support specially designed for small business health insurance. 

  • Manage benefits for an hour or less per month
  • Offer health insurance on your budget & save on taxes
  • Boost recruitment & retention in a tight hiring market.
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qualified small employer health reimbursement arrangement

Take Command makes QSEHRA simple and easy.

Flexible Designs

No more one-size fits all plans! Qualified Small Employer HRA plans can be customized and designed to achieve you or your clients’ goals and are more flexible with what types of plans they will reimburse.

Simple Administration

Take Command will automatically generate the QSEHRA documents your employees need and can help them search for and enroll in a plan online.

On-Ramp to Benefits

80% of our small business clients are net new to benefits. The Qualified Small Employer Health Reimbursement Arrangement is an affordable, simple way to offer scalable benefits to your team on your budget.

Learn More

Did you know that 80% of our small business clients are new to benefits?

Our QSEHRA Guide will walk you through how this benefits solution might work for your business.

award-winning qualified small employer hra administrator

Join the 5,000+ businesses saving on health benefits with Take Command

Union Orthotics and Prosthetics

"Facing a 40% renewal, our broker introduced us to the idea. Take Command provides the tools there for everybody to enroll in very easy formats on the platform."

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Taro Health

"To attract and maintain talent, we needed benefits. Managing our ICHRA has been simple and hands-off. I spend two hours a month managing and administering it."

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"Take Command has made it simple to set up and administer the small business HRA for StreamCare and we highly recommend it to other small businesses."

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Qualified small employer health reimbursement arrangements

Qualified Small Employer Health Reimbursement Arrangements (QSEHRA) are a new, super beneficial, and incredibly user-friendly way for small businesses to offer flexible health insurance to their employees. With their tax-advantaged and individualized structure, employees can have coverage for health care related expenses that are unique to their own needs.  

While we’ll go over this all below, here are the nitty gritty details up front: 

  • Employers reimburse eligible health care expenses. QSEHRA reimbursements options are outlined by annual eligible expense lists put out by the IRS.
  • The IRS sets annual QSEHRA contribution limits. Take a look at QSEHRA employer contribution limits for 2023 here
  • The IRS makes the rules. Each year, the IRS puts out new regulations outlining legal requirements that must be followed by employers participating in a QSEHRA.
  • Employer requirements must be met. While QSEHRAs are designed with flexibility in mind, there are a few key requirements that an employer must meet in order to participate in a QSEHRA.
  • Set up is really that easy! Setting up a QSEHRA plan for your business really does not have to be a migraine inducer. Reach out to a QSEHRA plan administrator and rest assured they’ll take care of all legal requirements, onboarding, and maintenance along the way.  


Employer reimbursement for health insurance premiums

Big questions these days are “How does health insurance reimbursement work?”, “Can I reimburse my employees for health insurance premiums?”, and “What are IRS rules for health insurance reimbursement? Don’t fret! Your fans at Take Command have got you covered. 

How does health insurance reimbursement work?

It’s really as simple as setting up a QSEHRA plan and communicating that plan with your employees. After you submit your legal documentation and onboard your employees, they can get started submitting reimbursement requests!  

Can I reimburse my employees for health insurance premiums?

Yep! Health insurance premiums are considered a QSEHRA eligible expense. You’re able to reimburse expenses each month that qualify as eligible expenses and fall within your predetermined budget. 

What are IRS rules for health insurance reimbursement?

Well, read on!  

QSEHRA rules

While there are QSEHRA rules that need to be considered, there is an incredible amount of flexibility that gives employers the freedom to build a plan that works best for them and their employees. We’ve provided a brief overview below so you know what to expect. As always, if you have any further questions regarding QSEHRA rules, we’re here to help! 

  • Same Terms Requirements: A good rule of thumb is that all employees need to be treated fairly and offered the same benefits under your QSEHRA. An employer cannot offer different funds to different employees without qualifying them with specified criteria (family size, age, full/part time employment, etc.).  

  • Unclaimed funds: If an employee ends up not being eligible to participate in the company’s QSEHRA, the funds allocated will stay with the employer. Similarly, if an employee does not make a claim in a given year, the employer keeps the money.

  • QSEHRA funding: A question we get asked a lot is “What is the source for funding a QSEHRA?” To keep the answer simple, the employer is solely responsible for funding the QSEHRA. Employees cannot contribute to a QSEHRA (they would just be paying for their health care expenses out of their own pocket).  

It’s really that easy. The IRS has made regular adjustments to QSEHRA rules over the last few years to make it as accessible and efficient for all players involved- they want to get you and your business on board!


QSEHRA employer requirements

The IRS has two main QSEHRA employer requirements: 

  1. Given that a QSEHRA is for qualified small employers, an employer must be small in order to participate. More specifically, a business is considered a “small employer” when they have less than 50 full-time employees. 
  2. The main function of a QSEHRA is to reimburse individual health insurance. As such, the second QSEHRA employer requirement states that businesses cannot offer a traditional health care plan simultaneously. Note: this requirement does not speak to benefits like life insurance or disability insurance.  

The IRS provides very clear outlines for their QSEHRA employee requirements: 

  1. In order to meet the QSEHRA employee requirements, an employee must be covered by an insurance plan. Again, the purpose of a QSEHRA is to reimburse individual health related expenses. In order for a QSEHRA to serve its purpose, the employee needs to have a health insurance plan! While the IRS doesn’t go so far as to determine how an employee receives their coverage (through a parent, spouse, or their own independent plan), it does state that the employee must receive Minimum Essential Coverage (MEC) which can be provided by major medical plans, Medicare, Medicaid, etc. 
  2. The second QSEHRA employee requirement is that employees must submit claims for reimbursement. As straightforward as this one seems, it’s an essential piece of the puzzle to ensure employees receive reimbursement for their expenses. 


Identifying the key differences between various health reimbursement arrangements is part of the process when selecting which plan will work best for you and your business. To keep it plain and simple- an “HRA for Dummies” if you will- let’s start by breaking down HRA vs. QSEHRA. 

Health Reimbursement Arrangement (HRA)

A Health Reimbursement Arrangement is a tax-advantaged health expense option. When a business participates in an HRA, their employees are able to submit reimbursement requests to their employers for health insurance and approved out-of-pocket expenses. Each month, the employer funds an allowance that employees can use on health expenses that will benefit them individually.

Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)

A Qualified Small Employer Health Reimbursement Arrangement follows the same overall structure of an HRA, but has a few distinguishing traits. QSEHRAs are specifically designed for small businesses of up to 50 full-time employees. It also has a predetermined maximum reimbursement limit for both single employees and employees with dependents.  

Similar to the specifications of a QSEHRA, the biggest differences between various HRAs are related to: 

  • Eligible businesses
  • Eligible employees
  • Whether the HRA and group health insurance can be offered simultaneously
  • Reimbursement limits
  • Tax credits

Nonetheless, the IRS has worked hard to ensure there’s an option for most everyone! If you’re interested in seeing how your business might benefit from an HRA, our expert QSEHRA administration team is ready to answer your questions.

QSEHRA eligible expenses

Another big question (with one of the most exciting answers!) is “What can QSEHRA funds be used for?” We think you’ll be pleasantly surprised. Each year, the IRS revises and republishes the list of QSEHRA eligible expenses and reimbursement limits for that new year. As a business owner, it’s essential to have a solid understanding of what the QSEHRA eligible expenses are so your employees can take advantage of the funds available to them and maximize their benefits. 

As you’re setting up your new QSEHRA, you, as the employer, need to complete an HRA plan document that outlines what’s reimbursable. Again, an integral part of facilitating a successful QSEHRA is having employees who can benefit from it!

For updated 2023 QSEHRA reimbursement limits and how they’ve changed over the last few years (hint: they’ve gone up!), read this

For a comprehensive list of the most updated QSEHRA eligible expenses, check out this article!

Some big QSEHRA eligible expenses include: 

  • Medical diagnoses, cures, treatments, and preventions
  • Personal care products
  • Health insurance premiums
  • Qualified long-term care services
  • And many more!

How much will you save with a QSEHRA?

Since QSEHRA reimbursements are tax-free, small business owners can enjoy considerable savings. Check out our QSEHRA tax savings calculator to get a savings estimate.

How to set up a QSEHRA

While setting up health insurance plans may seem like a daunting task, the IRS has really taken steps to keep the process as user friendly as possible. We’ve briefly discussed the general process below, however, check out this article for a more comprehensive overview

If you find that you just can’t add another thing to your to-do list, reach out to a QSEHRA plan administrator, like Take Command, and they’ll tackle it all for you- from beginning to end. While many QSEHRA plan administrators are extremely helpful, we highly recommend you do your due diligence in finding one that checks these boxes!

  • Pick a start date. First things first, pick your start date. See? Simple! If you don’t currently offer a group health care plan, you can start your new QSEHRA as soon as you’d like. If you do have an existing plan in place, you’ll need to cancel it before your QSEHRA is eligible to start.
  • Set cancellation date for any existing group policies. As previously mentioned, all existing group health care plans need to be canceled before your new QSEHRA begins. To avoid gaps in coverage, select a cancellation date that is one day before your new QSEHRA is set to start.
  • Confirm employee eligibility. While you are required to offer your QSEHRA to all full-time employees, you have some discretion in who else to offer coverage to. For example, you can choose, based on your budget and your own goals, whether or not to offer your plan to part-time employees as well.
  • Determine budget. One of the biggest benefits of a QSEHRA is being able to determine a reimbursement budget that best works for you and your business. While there are no minimum allowances, we recommend you take a look at the QSEHRA 2023 contribution limits
  • Establish legal documentation. Given that QSEHRA regulations are determined by the IRS there are, of course, regulations that need to be followed. Prior to your start date, you must submit all legal QSEHRA plan documents including monthly reimbursement amounts and reimbursement eligibility. 
  • Communicate benefits to employees. One advantage of participating in a QSEHRA is the flexibility it provides your employees in selecting health care coverage. In order to maximize this benefit, it’s essential to communicate with them around this new plan. They should have access to information about their start date, annual allowance, and how to find the best coverage for them. The best QSEHRA administrators (we’re especially fond of our own experts at Take Command) will actually handle all employee onboarding for you!  
  • Provide resources for employees. As an employee, researching and selecting the best health insurance plan can be an overwhelming and paralyzing task. As their employer, you can assist them by providing resources on various health care plans. Be sure, however, that you’re not assisting them in the decision making process! Again, if you need some direction and access to resources, our team at Take Command is here to help!

Interested in seeing how Take Command can help you implement and maintain your new QSEHRA? We’d love to hear from you!  


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