QSEHRA in Bloomfield Hills for Small Businesses That Want to Help Without a Group Plan
Many small business owners want to help their people with health costs, but a group plan feels too expensive or too complicated. A QSEHRA in Bloomfield Hills can be a simple middle ground. You set a monthly budget, and employees get paid back tax-free for coverage they choose.
We are CFH Insurance Consultants, an independent employee benefits consulting firm on Woodward Avenue, in business since 2007. No carrier owns us. We help small employers in Bloomfield Hills, Royal Oak, Rochester Hills, Novi and across Michigan set up health benefits that fit their budget.
QSEHRA
QSEHRA stands for Qualified Small Employer Health Reimbursement Arrangement. It is an HRA, a plan where the employer pays employees back for health costs. It is made for small businesses.
The basics:
- Who can offer it. Employers with fewer than 50 full-time employees that do not offer a group health plan.
- How it works. Employees buy their own health insurance. You pay them back, up to your monthly amount, tax-free.
- Limits. The IRS sets a yearly maximum, and it changes each year.
- Notice. Employees must get a written notice before the plan year starts.
Our part is to help you decide between a QSEHRA and an ICHRA, set the budget, and find and oversee the administrator who handles reimbursements. We are not the administrator. We help keep you compliant with the notice and plan document rules.
QSEHRA or ICHRA: which is better for a small business?
A QSEHRA is simpler and made for small employers. It has an annual cap, and it must be offered to all full-time employees on the same terms, with some room to vary by age and family size.
An ICHRA works for employers of any size and has no annual cap. It also lets you set different amounts for different employee classes, such as full-time and part-time. If you plan to grow past 50 employees, an ICHRA may fit better. We compare both with you.
What do I do if an employee already gets a Marketplace subsidy?
Talk to them before you start. A QSEHRA can reduce or remove the premium tax credit an employee gets on the Marketplace. The notice you give employees explains this, and they must report the QSEHRA amount when they apply. We help you word the notice clearly.
Common questions
Do employees need their own health insurance?
Yes. To get tax-free payments, employees need their own qualifying health coverage, such as a Marketplace plan. It has to be minimum essential coverage, and employees show proof of it before the QSEHRA can pay, with ongoing proof for each reimbursement. Coverage through a spouse’s employer plan can also qualify.
Can we offer a QSEHRA and a group plan together?
No. A QSEHRA is only for employers that do not offer a group health plan. If you already have a group plan and want to move to a QSEHRA, the group plan has to end first, and timing the switch to a plan year start keeps it simple for employees. An ICHRA is the arrangement that can sit alongside a group plan for a different class of employees.
Can we change the amount later?
You set the amount for each plan year. Changes usually happen at the start of the next year. Because the written notice has to state the amount before the plan year begins, a midyear change creates a notice problem as well as an employee relations one. The amount can be prorated for employees who join partway through the year.
Talk to us about a QSEHRA in Bloomfield Hills
Book a 30-minute call and tell us your headcount and budget. We will show you what a QSEHRA would look like next to other options. Our office is at 41000 Woodward Avenue, Suite 350 East, Bloomfield Hills, MI 48304. Call 248.370.8853.
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