A Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) is a tax‑advantaged health benefit available to small employers with fewer than 50 full‑time employees. QSEHRAs allow employers to reimburse employees for individual health insurance premiums and other qualified medical expenses, up to annual limits set by the IRS.
Employees must maintain Minimum Essential Coverage (MEC) to receive reimbursements tax‑free.
How QSEHRAs work
- Employers offer a fixed monthly allowance, subject to IRS annual limits.
- Employees purchase individual health insurance coverage and submit expenses for reimbursement.
- Employees may be able to coordinate QSEHRA funds with Premium Tax Credits (PTCs), depending on their eligibility and the employer’s contribution amount.
Availability through Georgia Access For Business
QSEHRAs will potentially be coming to Georgia Access For Business in a later phase.
Why employers prefer ICHRAs
Most employers who explore QSEHRAs ultimately find that an ICHRA better meets their goals, offering:
- Greater flexibility
- No contribution caps
- More options for structuring benefits
- A smoother experience for both employers and employees
While both ICHRA and QSEHRA allow employers to reimburse employees for individual health coverage, they differ in eligibility, flexibility, and compliance requirements. ICHRA is currently available through GAFB, with additional options such as QSEHRA expected to evolve over time.
Key differences between ICHRAs and QSEHRAs
| Feature | ICHRA | QSEHRA |
|---|---|---|
| Employer size limit | None | Fewer than 50 FTEs |
| Contribution limits | No federal cap | IRS‑set annual maximums |
| Employee classes | Allowed | Not allowed |
| Coordination with PTCs | Not permitted | Permitted under certain conditions |
| Availability on GAFB | Available at launch | Potentially coming in a future phase |