As with any employee benefits offering, employers must comply with QSEHRA rules and regulations. As mentioned above, there are QSEHRA employer requirements to comply with. QSEHRAs can only be offered to businesses with less than 50 employees, and they must not offer a group plan.
If your business already has a group health plan but you’re looking to switch to a QSEHRA, you can cancel your group plan at any time, not just at open enrollment.
- Employers have a few options when deciding on QSEHRA reimbursement. When it comes to what the QSEHRA can reimburse, the employer can decide:
- To reimburse all employees the same amount
- To reimburse all employees the maximum amount eligible
- To reimburse different amounts based on family
With all these decisions, utilizing a QSEHRA administration platform is helpful. Self-administered QSEHRAs can come with headaches for employers because of the time spent ensuring the company is following all the QSEHRA rules appropriately. So, it’s best to offload this task onto a trusted HRA administrator.
QSEHRA administration can be an easy task with the right guidance from an HRA administrator. Employers and employees appreciate the ease that an HRA administration platform offers. For example, Take Command works in accordance with legal, privacy, and tax regulations so you don’t have to worry about it. And we’re always available to you and your employees for any questions that arise.
What’s an HRA? HRAs for dummies
So far we’ve covered the basics about QSEHRAs, but let's look more at health reimbursement arrangements (HRAs) in general. Here’s a quick HRA for Dummies overview.
HRA vs. QSEHRA
HRA– health reimbursement arrangement– is the broad term explaining the reimbursement of employees by the employer for health insurance benefits
QSEHRAs or qualified small employer health reimbursement arrangements are the specific type of HRA that can be offered to small businesses with 50 people or less
QSEHRAs are affordable, tax-free, and easy to offer for small business employees
ICHRA vs. QSEHRA
If you’ve heard of an ICHRA (Individual Coverage Health Reimbursement Arrangements), they’re just another version of an HRA.
- ICHRAs are offered to companies of any size or scale, whereas QSEHRA administration is just for businesses of 50 employees or less
- ICHRAs can be combined with group plans where QSEHRAs cannot
- There are no annual contribution limits or employee maximums for coverage with an ICHRA
For an employee to get reimbursement from QSEHRAs, they must be covered by an individual insurance plan. And these plans must provide QSEHRA Minimum Essential Coverage (MEC) as defined by the IRS. MEC plans include major medical plans, Medicare and Medicaid. Make sure that you’re in compliance with QSEHRA limits for 2023 when setting up your QSERHA. QSEHRA administrators are available to make this a simple task for you.
How to set up a QSEHRA
So if you’re looking to offer a QSEHRA for 2023, you’ve come to the right place! QSEHRAs can be simple to set up and you’ll be on your way to offering competitive benefits to your small business employees.
The steps for how to set up a QSEHRA are:
- Design the reimbursement plan you want to offer
- Create the required legal plan documents using a QSEHRA plan document template
- Review compliance with QSEHRA requirements
- Set a start date for your QSEHRA and cancel any current group health insurance policies- if applicable
- Provide required notices to your employees
- Provide resources for your employees to buy their own health insurance plans
Once you’re up and running with a QSEHRA, you’ll need to make sure you stay compliant with your QSEHRA administration. This is where an efficient HRA administrator comes into play.
By outsourcing the administration process of providing a QSEHRA to your employees, you’ll save yourself so much time and hassle. Most of our clients report spending less than 1 hour PER month administrating their health insurance because they offload so much of it to us as an HRA administrator.
Next, we’ll provide you with the details and benefits of using third-party administrators for your QSEHRA.
How to set up a QSEHRA plan
Setting up a QSEHRA is easy with the right QSEHRA administrator. When searching for the best QSEHRA administrator, here are some important things to keep in mind:
- How much time it will save you
- Price per employee
- Compliance with legal and privacy requirements
- Ease of use for employers and employees
QSEHRA third-party administrators save you time with health insurance administration because they do the work for you. An HRA administrator is essential to use to administer an HRA for your business. And at Take Command, we have administrators readily available for both QSEHRAs and ICHRAs.
Take Command Health QSEHRA Administrators
- Make sure you avoid penalties that may arise with the compliance regulations
- Have a quick and easy sign-up process for the employer
- Take care of the legal aspect of the health insurance administration
- Handle tax documents concerning your HRA offering
- Support your employees throughout the process of setting up their HRA
Getting started with a QSEHRA administration is simple, and we’ll guide you through the whole process. We offer a user-friendly platform for your HRA and work with your employees to make sure they have all their questions answered. And with our customized administrative portal, we’re with your business and employees at every step of the way.
QSEHRA vs. ICHRA
Again, the two most common HRA options for businesses are QSEHRAs and ICHRAs. We’ve already touched on their difference, but to summarize QSEHRAs vs. ICHRAs:
- Are for small businesses of 50 employees or less
- Cannot be combined with a group plan
- Have annual contribution limits
- Must be the same size for all employees
For more details about who is eligible for QSEHRAs, check out our complete QSEHRA guide
- Are for businesses with any number of employees
- Can be combined with a group plan
- Have no annual contributions or employee maximums
- Allow customizable reimbursements for different classes of employees.
At Take Command, we offer HRA administration for both of these types of HRAs. As a small business owner, QSEHRAs are the right option for you. But as your business grows, you may consider switching to an ICHRA. So, we’re here to assist you through the growth of your business so you can continue offering competitive healthcare benefits for your employees.
Take Command is ready to assist you with customized QSEHRA administration. Whether you're a business with a few employees or a growing small business, we’re here to make the health insurance administration process a breeze for you. Set up a call with one of our experts today to get started with your QSEHRA!