Give your employees tax-free reimbursements for their health insurance expenses.
If your business has fewer than 50 full-time eligible employees and does not offer a traditional group health plan, a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) may be the perfect solution. QSEHRA allows you to offer employees tax-free reimbursements for health insurance premiums and qualified medical expenses without the administrative burden of a group plan.
With QSEHRA, you choose a monthly stipend amount. Your employees use that allowance to enroll in their own individual ACA-compliant health plan and receive reimbursements tax-free.
Benefits of QSEHRA for employers.
- Designed specifically for employers with fewer than 50 full-time eligible
employees. - Tax-free for both employer and employee.
- Employees can choose the individual coverage that fits their needs.
- Helps attract and retain talent without managing a group plan.
- Easy administration.
What is a Qualified Small Employer HRA?
QSEHRA is a federally regulated health reimbursement arrangement created by the 21st Century Cures Act. It is available to employers who are not subject to the Affordable Care Act’s employer mandate and do not offer a group health insurance Plan. Employers select a fixed monthly allowance that stays within the IRS limit. Employees then find a plan that works for them and request reimbursement for premiums and eligible expenses like prescriptions or copays through a secure, third-party administration platform.
The QSEHRA structure is a simple and cost-effective way to provide health insurance support while giving employees full freedom to choose their own plan.
How YourMedPlan helps set up and manage QSEHRA.
YourMedPlan and our third-party partners help you set your monthly reimbursement budget, ensure compliance, and communicate the program clearly to employees. We also provide individual support to each team member so they can find the right plan, navigate enrollment, and access health insurance assistance throughout the policy year.
We make it easy for you to offer real health insurance support without the overhead of managing a group policy.
Ready to simplify your employee health benefits with a QSEHRA? Get in touch today.
Frequently Asked Questions about QSEHRA
Who qualifies for a QSEHRA?
Employers with fewer than 50 full-time eligible employees who do not offer a group health plan can offer a QSEHRA.
What can employees get reimbursed for?
Employees can receive tax-free reimbursements for individual health insurance premiums and qualified out-of-pocket medical expenses, as long as they are enrolled in minimum essential coverage.
How much can employers contribute?
The IRS sets annual contribution limits. Employers can choose any amount up to the maximum. For 2025, the IRS allows employers to reimburse up to $6,350 per year for employees with self-only coverage and up to $12,800 per year for employees with family coverage.
Does QSEHRA affect premium tax credits?
Yes, employees must report QSEHRA availability when applying for Marketplace coverage. If deemed affordable, it may reduce their premium tax credit eligibility dollar for dollar. YourMedPlan will assist employees with determining premium tax credit eligibility.
Can part-time employees be included?
You may choose to include or exclude part-time employees, but must apply consistent eligibility rules across all contribution amounts, outside of single vs family.
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