Qualified Small Employer Health Reimbursement Account, pronounced “Q-sehra”

QSEHRA, also known as a small business HRA for employers with fewer than 50 employees is an employer-funded, tax-free health benefit used to reimburse employees for personal health care expenses. QSEHRA’s began in the marketplace in 2017.

QSHERA’s are only for companies under 50 employees, and have an annual cap on the amount that each employee can be reimbursed for. Money is made available to employees on a monthly basis.
QSHERA Single Family
2020 Annual Contribution $5250 $10,600
2020 Monthly Contribution $437.50 $883.33
Note: Unclaimed funds remain with the employer.

In determining how much an Employer should set their reimbursement amount at, there are a few things to keep in mind. The main point is that it must be done fairly.

Options include:
  • Reimburse all employees the same amount.
  • Reimburse all employees the maximum amount they are eligible for.
  • Reimburse different amounts based on family size.
  • Reimburse different amounts based on employee age.
Employers can choose for their QSEHRA to reimburse for:
    • Insurance Premiums Only. This includes individual health insurance, dental premiums, vision premiums, etc, as long as the employee has Minimum Essential Coverage (MEAC). Employers can also choose if they want to reimburse employees for participating on their Spouse’s group health insurance plan.
    • Insurance Premiums + Qualified Medical Expenses. Eligible expenses include doctor visits, copays, dental cleanings, etc. See the entire list of options in IRS Publication 502.
Employee classes for reimbursement include
  • Past-Time employees
  • Seasonal employees
  • Employees under 25 years old at the start of the QSEHRA plan year.