EMPOWER
Qualified Small Employer HRA
Advanced Flex Plan Administration with the Human Touch

Qualified Small Employer HRA

Introduced in 2017, the Qualified Small Employer HRA (QSEHRA) allows small employers who do not offer a Group Health Plan to provide funds to employees to purchase individual health insurance coverage and provide reimbursement for 213(d) qualified expenses. Introduced in 2020, the Individual Coverage HRA is available to all employers and has fewer restrictions.

Eligibility

Employers

An Employer must meet all the following:

  • The Employer cannot be an Applicable Large Employer (ALE). This typically means that an Employer must have fewer than 50 full time employees.
  • The Employer cannot offer a Group Health Plan to any employees.

Participants

  • Benefits are tax-free only if covered by a plan with minimum essential coverage (MEC). 
  • To be eligible, the employee cannot be offered a Group Health Plan.

Who Can Contribute

Only the Employer can contribute to a QSEHRA.

Advantages of a QSEHRA

Employers

  • Employers save on premiums by not offering a Group Health Plan.

Participants

  • Employees receive tax-free reimbursement to purchase individual coverage or pay for 213(d) qualified expenses.

Versus Individual Coverage HRA

A QSEHRA  is similar to an Individual Coverage HRA (ICHRA). Below are the key differences.

ICHRA

QSEHRA

Premium reimbursement

213(d) medical expense reimbursement (optional)

Available to Employers of all sizes

X.

Subject to contribution limits

X

Employees may opt out to receive full premium tax credit

X

How it Works

For Employers

The Employer defines the terms of the QSEHRA and enrolls new employees.

QSHRA funds are available to employees on the first day of the Plan Year.

EMPOWER administers the QSEHRA and issues reimbursements to employees to purchase coverage or pay for qualified medical expenses.

For Participants

Employees are typically automatically enrolled in the QSEHRA.

Participants purchase individual coverage or pay for medical expenses with their own form of payment.

Participants file claims to EMPOWER with a receipt for coverage or service. EMPOWER reimburses claims conveniently from the Employer’s bank account.

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Click the above link if you are a participant who has an FSA, HSA, or HRA with EMPOWER.
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Click the above link if you are an Employer or Consultant.