Open enrollment and insurance premium increase season is just around the corner. Interested in a more flexible, fixed cost alternative to your traditional group health insurance plan? A Qualified Small Employer Heath Reimbursement Arrangement (QSEHRA) might be the solution you have been looking for. A QSEHRA allows an employer to reimburse employees for insurance premiums up to $4950 for single coverage and $10,000 for family coverage each year, in place of offering a group health plan. Qualified small businesses must have fewer than 50 employees and may not offer a current group healthcare plan to any employees.
With a QSEHRA, employers can relieve themselves from the burden of unpredictable premium increases, while allowing their employees more choice in the type of coverage and services they select. All full-time employees must be covered by the same terms of coverage and there are some record-keeping and administrative responsibilities that need to be considered. Notice of QSEHRA availability must be provided to the employee at least 90 days in advance of the start of the plan year – so time is of the essence. Contact a professional CPA firm, such as Bumpers & Company, today to help you run a financial cost/benefit analysis and determine if this solution makes sense for your business. If you choose to offer a QSEHRA to your employees, please follow up with a healthcare law professional to ensure that your QSEHRA is in total compliance with the law.