Frequently Asked Questions

What are QSE HRA's?

A Qualified Small Employer Health Reimbursement Agreement allows small businesses to give tax-deductible funds to employees for medical expenses and insurance premiums, without administering a company group plan. Previously, HRA plans were not compliant with the Affordable Care Act, but in December 2016, the 21st Century Cures Act was passed, once again making HRAs an affordable health benefit option for qualified small businesses.

What companies qualify for a QSE HRA?

There are only two criteria for a company to qualify for a QSE HRA plan. First, the company must be a small business, meaning fewer than 50 employees (or 50 FTE employees). Second, a business cannot offer a healthcare plan to any number of employees. If you are a small business looking to start offering health benefits, a QSE HRA may be the option for you.

What are the benefits of offering a QSE HRA plan for my company?

Offering reimbursement for individual insurance plans not only rewards your company with tax deductions, it also helps attract talent and makes employees happier. QSE HRA's have fewer administration requirement than a typical group plan because employers reimburse employees for (a portion of) their coverage and don’t have to deal with the administrative tasks of administering a group plan. It also allows employees to select a plan that meets their needs versus enrolling in a group plan with one set of benefits that may be more/less than what they desired.

How much does my company contribute to a QSE HRA plan?

It is up to your company how much you offer your employees. Single individuals can be offered up $4,950, and married individuals can be offered up to $10,000. This money is put into the QSE HRA fund that employees are reimbursed from for medical expenses, including individual health insurance plans. The reimbursed money is tax free, and your company can deduct the reimbursements from your yearly tax obligation.

Do I need to select a group health insurance plan for my QSE HRA?

No, group health insurance plans are not allowed under a QSE HRA. A Qualified Small Business Health Reimbursement Agreement is based on refunding employees' medical expenses (up to an amount you specify) through a company funded account. Companies do not deal with insurance companies directly; instead, employees purchase individual insurance plans on the market and present your company with an EOB statement to substantiate insurance or other medical costs.

What are the requirements for administering a QSE HRA?

Employers are required to record all premium and medical payments, distribute detailed plan documents, keep track of reimbursement totals, make decisions on what is and isn’t covered under your company’s plan, and more. QSE HRAs are designed to be flexible, which means you have a lot of options on how to create and administer your plan. COBRA Solutions' QSE HRA Manager software will streamline the whole process and make it easy to follow the law.

How does a QSE HRA work?

QSE HRA health plans are based on reimbursements from a company fund. When a plan is first created, the company decides the maximum reimbursement amount for employees, who can then purchase health insurance on the marketplace. After an employee has presented an EOB statement or other proof of coverage, they can be reimbursed from the company fund. QSE HRA funds are not limited to insurance premiums; employees can use the funds for any and all medical expenses. However, employers must keep track of all reimbursed medical expenses in order to qualify for tax deductions.

Who contributes funds to a QSE HRA?

QSE HRAs are funded solely by the employer. Employees cannot contribute to the funds.

What does QSE HRA Manager do?

QSE HRA Manager is software designed to help streamline the administration of a QSE HRA plan. It walks you through your options when setting up a plan for the first time, it writes the mandatory and detailed Plan Document for you, keeps track of expenses and funds, and much more. With QSE HRA Manager, you don't need to be an expert on the law to stay compliant and earn your business tax deductions.