A tax-free health allowance for teams under 50
A Qualified Small Employer HRA (QSEHRA) lets a business with fewer than 50 employees — and no group health plan — reimburse workers tax-free for individual health insurance and medical expenses, up to annual limits set by the IRS.
You set a monthly allowance; employees buy their own individual coverage and submit proof, and you reimburse them tax-free up to the IRS annual cap (with a higher cap for those covering a family). It’s simpler than a group plan, has no participation minimums, and gives you a fixed, predictable cost.
Both reimburse individual coverage tax-free. QSEHRA is only for employers with fewer than 50 employees and has IRS dollar caps but no class flexibility. ICHRA works for any size, has no dollar cap, and lets you vary allowances by employee class. We’ll help you pick the right one.
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They can have both, but the QSEHRA allowance reduces (and may eliminate) their premium tax credit for the months it’s offered. We coordinate the two so employees come out ahead.