Feds Help Small Employers Attract & Retain Employees

By GDI Client Services

The 20th Century Cures Act gave birth to QSEHRAs. This type of HRA permits employers who do not offer a group health plan and have less than 50 full-time employees to reimburse all IRS Code 213(d) expenses (including premiums for individual health plans) on a tax-free basis. The statutory maximum annual benefit is $4,950 for employee-only coverage and $10,000 for family coverage. Employers may choose to offer a lower maximum annual benefit, but they may not exceed the statutory amount. The benefit must also be pro-rated for plan years that are less than 12 months.

Like a traditional HRA, QSEHRAs are 100% employer-funded. In order to maintain the benefit’s tax free nature, participants who use the benefit for an individual health plan must be sure that the health plan offers (the Affordable Care Act’s definition of) minimum essential coverage. Participants who use the QSEHRA benefit toward coverage purchased on a public exchange will have any federal subsidy they may be receiving reduced by the amount of the benefit.

Contact GDI’s Client Services Team at clientservices@gdynamic.com for additional information and/or to set up a QSEHRA.