What is a QSEHRA option for small employers in the U.S? There are many new rules with the ACA (I like to call it the “adorable” care act) rules. The QSEHRA option is a good option for small employers who want to help their employees with medical fees. However, there are a lot of “ifs, ands, and buts” when it comes to handling this small employer option.
By the way, Good Neighbor Insurance provides international medical travel insurance as well as international medical insurance for expatriates living outside the U.S. Good Neighbor Insurance does not provide QSEHRAs but they do provide all kinds of international individual, family, and employer group medical insurance for those residing outside the U.S.
What is a QSEHRA? A QSEHRA is a Qualified Small Employer Health Reimbursement Arrangement, introduced as a legal benefit option at the beginning of 2017 (https://www.cedrsolutions.com/qsehras-a-new-healthcare-reimbursement-option-for-small-employers/). It allows limited pre-tax reimbursement of health care expenses to eligible participating employees. Eligibility, according to what I’ve read so far, requires an employee to have an MEC health insurance plan. I’m still hoping there is an exception for ex-patriates, but I have not yet found documentation to that effect.
The new rules cover everything from who’s eligible to how to register and how to report coverage on employee’s W-2 forms.
“It’s a huge amount of administration, honestly, for small employers,” Carlson says.
The plans, she says, “could be attractive to a small employer if they had an administrator that was savvy in the structure and the administration. … I would think it would be very hard for a small employer to just look at this and say, ‘I am setting this up without any assistance.’”
Despite the lengthy rules, Carlson says, the value of the plans is that they once again give small companies a way to make sure that the extra money they are giving them in lieu of insurance is actually being used is being used for healthcare.
But, says, because the reimbursement are made on a pre-tax basis, “one of the consequences of not doing it correctly is creating extra taxation for the employees” if the plan or payments from it are found to be in violation of the rules.
Here is more information on this – https://www.dpath.com/qsehra-faqs/
Which employers can offer QSEHRAs?
Small employers with fewer than 50 full-time equivalent (FTE) employees AND who do not offer a group health plan to any of their employees can offer QSEHRAs to their staff. An FTE employee is one who works 130 hours per month, or 30 or more hours per week for 120 consecutive days.
Can employers who have a group insurance plan also offer a QSEHRA?
No. The Cures Act does not apply to small employers who offer a group health plan.
What benefits does a QSEHRA cover?
As defined in Section 213(d) of the Internal Revenue Code, a QSEHRA can cover the cost of any documented healthcare expense. In addition, employees can use their QSEHRA to help pay for individual health insurance premiums. One thing to keep in mind is that all covered costs, including medical expenses and insurance premiums, must be documented.
“The world is a book, and those who do not travel read only one page.” – Saint Augustine
Get travel medical insurance for your peace of mind and wallet – www.gninsurance.com.
- “Each year, 1.3 million people are killed and 20–50 million are injured in motor vehicle crashes worldwide….and 25,000 of the deaths are among tourists. Nearly half of medical evacuations back to the United States are the result of a car crash, and a medical evacuation can cost upward of $100,000″ – https://wwwnc.cdc.gov/travel/page/road-safety.