What are eligible expenses?
QSEHRA expenses that are eligible for reimbursement are determined by IRS Code Section 213(d) and, in the case of QSEHRAs, certain employee-paid individual health insurance premiums are eligible.
How does QSEHRA work for employees?
It’s simple! To be eligible, employees must provide you with proof that they are covered with minimum essential coverage (MEC). Tax consequences may result if there is failure to do so, including the employee being taxed for employer reimbursements. The employer or a plan administrator, like Flyte HCM, must confirm all employee expenses for reimbursement.
There are some simple, yet necessary, actions to take when an organization provides a QSEHRA.
Three items need to be addressed:
- What will your contribution amounts look like? As of today, the IRS allows organizations to provide $5,450 each year to a single employee and $11,050 each year to an employee plus their family.
- Which types of employees qualify? Legally, every full-time employee needs to qualify and take part, but other employees, such as those who are part-time or seasonal, may be excluded.
- What will your written notice consist of? A written notice must be provided to all employees at least 90 days prior to the plan year beginning, providing them with information on the QSEHRA. This must also be given to new staff members within their first day of employment (the 90 day rule is waived in this scenario).